Preamble

[Mr. SPEAKER in the Chair]

OLD AGE PENSIONS

Mr. Maxton: The National Federation of Old Age Pensioners have asked me to present to the House a Petition on their behalf. This Petition is signed by over 4,090,000 electors from various parts of the country. They say in their Petition:
We the undersigned do solemnly protest against the Government's Old Age Pensions and Determination of Needs Bill and consider it is a denial of the will of the people. Wherefore your petitioners pray that a new Pensions Bill be introduced immediately providing for a pension of 30s. per week for all at 60 years of age, to be given unconditionally, thereby ensuring justice and freedom from want in old age.
This Petition has over 4,000,000 signatures, and I have very great pleasure in presenting it to the House.

Oral Answers to Questions — GAS INDUSTRY (POST-WAR ORGANISATION)

Mr. Neil Maclean: asked the Minister of Fuel and Power what suggestions he has made to any sections of the gas-producing undertakings to formulate proposals; whether he proposes to set up a committee to hold an inquiry to consider the conditions of the industry; whether he is yet in a position to give the names of the individuals who have been invited to join the committee; and what interests they represent?

The Minister of Fuel and Power (Major Lloyd George): I have asked the gas industry to submit proposals on the organisation of the industry in the post-war period, and I have just received the British Gas Federation's Report on this subject. Until I have had the opportunity of considering this Report, I am not in a position to make any statement.

Mr. Maclean: Will the right hon. and gallant Gentleman make a statement as soon as possible after he has read the Report?

Oral Answers to Questions — COAL INDUSTRY

Open-cast Sites, Stoke-on-Trent

Mr. Ellis Smith: asked the Minister of Fuel and Power why Mr. Arthur Jones, a farmer, and several miners, who are not fit to work in the mines, are prevented from working the easily accessible coal on 30 acres at Ashenough Farm, Talke, Stoke-on-Trent?

Major Lloyd George: The site is believed to contain a considerable tonnage of coal which could be worked by open-cast methods and has already been earmarked by the Ministry of Works for future operations.

Mr. Smith: Is it not a fact that these men have wanted for some time to work this coal; who has prevented them from doing so? Men not fit for work in the mines are eager to work at getting this coal.

Major Lloyd George: My hon. Friend will be aware that the Ministry of Works, who are responsible for the working of these open-cast sites, have been making borings for some considerable time, and this is one of the sites which in their opinion they will be able to work.

Mr. Smith: Will the men mentioned in the Question be given preference when work is begun?

Major Lloyd George: We will certainly look into that.

Volunteers

Mr. Tinker: asked the Minister of Fuel and Power whether he is in a position to state how many young men have volunteered for work in the coalmines who would otherwise have had to go in the Services and whether any part of the country has shown a marked preference for colliery work?

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Tomlinson): I have been asked to reply. Up to 25th September, the latest date for which figures are available, the number of men who had volunteered for work in the coalmines as an alternative to service in the Forces, and had been placed in coalmines, numbered


3,366. An additional number volunteered but subsequently withdrew their offers. There is no evidence of any marked preference for coalmining as against service in the Forces in any part of the country.

Mr. Tinker: When men volunteer for coalmining are they allowed a preference for any particular part of the coalfield, or do they have to go wherever they are directed, whether they want to or not?

Mr. Tomlinson: I could not answer that without notice, but I think they go where they can best be used.

Miners, Armed Forces (Release)

Mr. Tinker: asked the Minister of Fuel and Power the conditions by which ex-colliery workers will be released from the Services; and can he give the number who will come under it?

Major Lloyd George: As regards the first part of the Question, I would refer my hon. Friend to the answer I gave on 19th October to my hon. Friend the Member for East Rhondda (Mr. Mainwaring). As regards the second part, I am advised by my right hon. Friend the Secretary of State for War that it is not possible at this stage to estimate the number who will be affected.

Mr. Tinker: Have the Government laid down definitely the conditions under which these men shall be released from the Services? I take it that the answer to which he has referred did lay them down definitely, and if that is so, it is the cause of a lot of dissatisfaction, because the House of Commons has not discussed what the conditions ought to be.

Major Lloyd George: If my hon. Friend will study that answer, he will find that it is clear what men are involved and what has happened at the moment. The reason the information cannot be given is because all the particulars have not yet come in.

Mr. Shinwell: Is the Minister aware that since he made his statement hundreds of these men have been writing to hon. Members asking what is to be done, and can he not be more specific, so that these men can be satisfied?

Major Lloyd George: I am sorry if that is the case, but that is not due to anything we have done. I gave an answer to the Question I was asked, and it is

a very explicit one. I have written to many hon. Members personally, and if any hon. Member wants further information, I will give it, but if the hon. Member will study the answer given, he will find there all the information which is necessary.

Mr. Tinker: In view of the unsatisfactory state of the position, I beg to give notice that I want the whole matter cleared up, so that people may know exactly what they have to do.

Man-Shifts

Flight-Lieutenant Raikes: asked the Minister of Fuel and Power how the number of shifts per person per week worked in the coalmining industry during the period 1st January to 30th September, 1943, compared with those worked in the corresponding period of 1942, in the country as a whole and in each district?

Major Lloyd George: As the answer involves a number of figures, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT. As stated in my reply to a similar Question on 26th October, there were more holidays taken in January/September, 1943, than in the corresponding period of 1942, and it would, therefore, be misleading to compare the figures for the two years.

Following is the answer:


Average number of shifts worked per wage-earner per week in the Coalmining Industry.


District.
January-September.


1942.
1943 (provisional).


Scotland
…
5·81
5·55


Northumberland
…
5·17
5·12


Durham
…
5·36
5·21


S. Wales and Mon.
…
5·22
5·03


Yorkshire
…
5·12
4·97


North Derbyshire
…
5·41
5·15


Nottinghamshire
…
5·14
4·96


South Derbyshire
…
5·63
5·61


Leicestershire
…
5·53
5·34


Cannock Chase
…
5·27
5·13


Warwickshire
…
5·04
4·90


Lancs, and Cheshire
…
5·37
5·16


North Staffs.
…
5·08
4·87


Cumberland
…
5·11
5·30


North Wales
…
5·51
5·14


South Staffs.
…
5·62
5·14


Shropshire
…
5·23
5·02


Bristol
…
5·46
5·33


Forest of Dean
…
5·38
5· 02


Somerset
…
5·38
5·32


Kent
…
4·85
4·79


Great Britain
…
5·31
5·13

Coal Face Shifts Lost

Mr. Keeling: asked the Minister of Fuel and Power how the percentage of shifts lost at the coal face in September, 1943, compares with the percentage lost in September, 1942?

Major Lloyd George: The percentage of shifts lost at the coal face during the four weeks ended 25th September, 1943, was 15.2 per cent., as compared with 13.7 per cent. during the corresponding period a year ago.

Voluntary Absenteeism

Mr. Keeling: asked the Minister of Fuel and Power the average percentage of voluntary absenteeism at the coal face on each day of the week during September, 1943?

Major Lloyd George: Absenteeism percentages for each day of the week are not available. The percentage of voluntary absenteeism at the coal face during the four weeks ended 25th September, 1943, was 6.1 per cent.

Mr. Keeling: Will my right hon. and gallant Friend consider making this information available to us?

Major Lloyd George: I am afraid that is quite impossible, because already colliery companies have been complaining to me of the shortage of their staffs and this would mean a tremendous addition to their work, and I could not possibly contemplate it.

Mr. Keeling: Would the right hon. and gallant Gentleman not consider cutting out some of the unnecessary information which collieries are asked to supply, in order that they may supply this vital information?

Major Lloyd George: What is unnecessary is a matter of opinion.

Output

Mr. Keeling: asked the Minister of Fuel and Power the reasons for the decline in the output of coal per man-shift worked at the coal face since his Department was established?

Major Lloyd George: The output per man-shift worked at the coal face improved considerably following the establishment of my Department and was well maintained relatively to the preceding

year until the early summer of this year. It is impossible, by way of question and answer, to give the reasons for the recent decline, but I would refer my hon. Friend to the statements made by my right hon. Friend the Prime Minister and myself during the recent Debate on coal.

Mr. Keeling: Does my right hon. and gallant Friend admit that in fact the output per man is less now than when he took office?

Major Lloyd George: I could not admit that unless I go further and say that it has improved considerably over the three quarters following upon the quarter in which the Ministry was formed. At this moment it is only very slightly below what it was at the start.

Clifton and Point of Ayr Collieries

Major Lyons: asked the Minister of Fuel and Power (1) in relation to the Clifton Colliery, Nottingham, the shares of which are now held by the Treasury, the total monthly output and the output per man-shift, respectively, for each of the 12 months prior to Government acquisition and corresponding figures for each month since that date;
(2), the output and the output per man-shift, respectively, for each of the six months prior to Government control of the Point of Ayr Colliery and the figures for the months of the period since that control?

Major Lloyd George: It is not in the public interest to give figures relating to individual collieries.

Major Lyons: Can the right hon. and gallant Gentleman say whether there has in fact been a decrease in production since the Government controlled these two undertakings?

Major Lloyd George: No, that is not in fact so, but I do not think it is very wise to give information of that character, because, as I have tried to point out, what has happened is not because the Government have taken the collieries over. In one case there has been an improvement; in the other case, owing to the condition in which the colliery was, a tremendous amount of development work had to be done.

Sir Herbert Williams: What is the public interest which prevents the giving


of this information? Are the Government afraid that if they gave it the Germans would drop a bomb down one of those collieries?

Major Lloyd George: I do not want to discuss that, but I dare say my hon. Friend would think that. If he worked it out for himself, he would see there was nothing in it.

Oral Answers to Questions — TAXI-CABS (PETROL)

Mr. Bartle Bull: asked the Minister of Fuel and Power whether he will consider increasing the allowance of petrol for taxi-cabs?

Major Lloyd George: The taxi-cab service is at present being reviewed by my Department, in consultation with the other Departments concerned. I will let my hon. Friend know when I have come to a conclusion.

Mr. Mathers: Will the right hon. and gallant Gentleman also review the position of the private hire services, which in many respects have been in a worse position than the taxi-cabs in regard to supplies of petrol?

Commander Locker-Lampson: Is the right hon. and gallant Gentleman aware that at places like Waterloo people have waited from 10 till 12, two hours, without a single taxi coming, although outside 120 taxi-cabs have been seen to go by with their flags up?

Mr. Levy: Is not one of the difficulties the lack of rubber for tyres for these vehicles, and for buses also? It is not necessarily a case of petrol.

Oral Answers to Questions — TRADE AND COMMERCE

International Cartels ("Germany's Master Plan")

Sir H. Williams: asked the President of the Board of Trade whether he can make any further statement on the question of an inquiry into the infiltration of German influence into British industry, in the light of the book "Germany's Master Plan"?

Mr. Ellis Smith: asked the President of the Board of Trade whether an examination has now been made of the public-

cation "Germany's Master Plan"; who were the British firms and persons involved in these arrangements; whether he will make a full statement on the allegations made and whether it is the Government's intention, in preparation for the post-war period, to put an end to all such arrangements?

The President of the Board of Trade (Mr. Dalton): This book by two American authors is mainly concerned with the relations, over the past 30 years, between American and German firms. So far as British firms are concerned, His Majesty's Government, as the Prime Minister has stated, already have under consideration the question of international cartels after the war.

Sir H. Williams: Would the right hon. Gentleman cause some inquiry to be made comparable with that which took place in the United States, so that we can obtain the facts with regard to this country?

Mr. Dalton: I must plainly tell the hon. Gentleman that it was at the suggestion of himself and certain other hon. Members that I read the book, and, frankly, I learned nothing new from it. There is nothing new, so far as British firms are concerned. I think the book has been somewhat over-publicised in this country so far as British firms are concerned. I repeat that this is mainly a story about American and German firms.

Mr. Ellis Smith: Does not the right hon. Gentleman remember that a few of us on this side of the House raised this issue before the war and got nothing but jeers and sneers from other people? In view of the fact that it has now been proved correct, will he have a full investigation made into this matter so that we can know the firms and persons responsible for betraying the interests of this country before the war?

Mr. Dalton: I would always be very happy to organise or arrange an investigation if it were going to tell us something new. It is the business of the Government to acquaint themselves with the necessary facts in this case, with a view to a decision as to post-war policy. The Prime Minister has answered a Question in this House, and I have also answered Questions on the same subject. The Government regard it as an important


item to be decided in relation to post-war policy, as to what regulations, if any, should be imposed upon these international cartels. We are studying that matter, and we have a considerable amount of information about it, and I am frankly doubtful whether a further investigation would tell us more than we know already.

Mr. Stokes: Will the right hon. Gentleman tell the House whether he read the American version of this book or the British version, and if he has not read the American version, will he procure a copy?

Mr. Dalton: I have taken great care to read the American version. I did not read the British version, because it has been abridged and reduced.

Mr. Shinwell: If the right hon. Gentleman denies certain of the allegations made in this book, will he cause to be published a Government refutation, so, that we may know where we stand? May I ask him to treat the matter rather more seriously from the standpoint of the German and enemy patents, held by various cartels operating in this country?

Mr. Dalton: I would beg hon. Members not to assume that the Government are completely ignorant in this matter. We do not need to make ad hoc investigations into these matters in order to acquaint ourselves with the facts. I believe that we know the facts in this case, and I have already stated that the Government are considering what action is necessary. The matter of German patents is one for the Peace Treaty. For the moment these are all abrogated. All these agreements with enemy aliens are frustrated legally. I have said that to the House before.

Black-out Materials

Mr. Douglas: asked the President of the Board of Trade whether he is aware of the shortage of black-out material and that some shops have not had a supply for months; and what steps he is taking to remedy the inconvenience so caused?

Mr. Dalton: Owing to a heavy seasonal demand, there is at present some shortage of black-out cloth. Output is being maintained at as high a level as supplies of labour and cotton yarn permit and is sub-

stantially greater than last year. The public can help by not renewing their black-out curtains if they are still serviceable, or can be repaired.

Mr. Douglas: Is some of this material held by firms being diverted to other purposes?

Mr. Dalton: I hope not.

Surplus Goods and Factories (Post-war Disposal)

Mr. Rhys Davies: asked the President of the Board of Trade whether he has a statement to make regarding the post-war disposal by the Government of surplus goods and factories?

Mr. Dalton: Yes, Sir. As I have already stated in the House, there must be, after the war, an orderly disposal of surplus goods, which, on the one hand, will not allow profiteering at the expense of the consumer, and, on the other hand, will pay due regard to the interests of producers and distributors. The Government have decided that disposal shall be carried out, in each particular case, through the agency of the Department mainly concerned with the supply of the goods during the war. Before working out the plans for disposal, the Board of Trade, together with other responsible Departments, will consult with representatives of the producers and distributors concerned.
The Government have further decided that the Board of Trade, through its Factory and Storage Control, shall co-ordinate the disposal of all surplus Government factories. With a view to decisions being taken as to the best use to which these can be put in the national interest, the Control will compile lists of factories and of applicants for them. The Government recognise the importance of reaching such decisions before the end of the war in as many cases as possible, but much must depend on the course of events, including future programmes of war production. Special attention will be paid to the release of factories urgently needed for peace-time production and to the possibility of converting into trading estates some of the premises no longer required for Government work.

Mr. Davies: Arising from that reply, for which I thank the right hon. Gentleman, may we presume that it is possible


within the ambit of the reply that the Government will retain in their own possession some of the factories that are necessary? Will the Government be good enough to bear in mind, in disposing of these factories, their location, in relation to those areas that were depressed between the two wars and into which no new industries have entered before?

Mr. Dalton: Yes, Sir, and I am much obliged to my hon. Friend for asking this question. Certainly, it is not ruled out that the Government will retain these factories. We are anxious, in the first instance, to have information as to the alternative uses to which each factory can be put, whether by Governmental, private, trading estate or any other agencies. There are many possible agencies who desire to avail themselves of these very valuable premises, in which, in many cases, much Government money has been sunk. In reply to the second part of my hon. Friend's question, we shall certainly have particular regard to the employment aspect of the case in each particular locality.

Mr. Hammersley: Bearing in mind the importance of the distribution of surplus stocks, will the right hon. Gentleman have regard to the desirability of not making the avenue of distribution too narrow, because in so doing he may create a new vested interest?

Mr. Dalton: Certainly. We are anxious that all legitimate interests should be fairly and properly represented, and it is largely with that object in view that consultation will take place between my Department and other Departments on the one hand, and representatives of producers and distributors on the other. When I say "producers," I include the representatives of the trade unions and of the industries concerned.

Schoolchildren's Boots, Stoke-on-Trent (Leather for Repairs)

Mr. Arthur Hollins: asked the President of the Board of Trade whether he will issue permits to Stoke-on-Trent education authority for supplies of leather for the repairing of boots of schoolchildren in some of the senior schools and boys' clubs, in view of the fact that boot repairing shops are working to a maximum, with long periods

being required for repairs, such permits to be approved by His Majesty's inspectors of schools?

Mr. Dalton: In view of the shortage of leather, supplies to schools and boys' clubs for repairs could only be made at the expense of skilled repairers, and I do not think that, in these circumstances, I should be justified in adopting my hon. Friend's suggestion. I have asked for a special report on the position in Stoke-on-Trent from my Regional Director of Footwear Repairs, and I will communicate again with my hon. Friend.

Lost Clothes Coupon Books

Mr. McEntee: asked the President of the Board of Trade what percentage of clothing coupon books have been lost by the public during the year to the latest date for which figures are available; and what proportion have subsequently been reported as found and returned to the owners or to his Department?

Mr. Dalton: The number of lost clothing books reported to the Board of Trade between 1st January and 31st August was about 1 per cent. of the total annual issue. The number of lost books returned to the Board of Trade in this period was 26,000.

Woollen Piece Goods (Export)

Mr. Creech Jones: asked the President of the Board of Trade to what extent the release of woollen piece goods already prepared for shipment to the United States of America has been refused and export licences for woollen goods held up in respect to North and South America; and will he make a statement on the Government's policy on this matter?

Mr. Dalton: Licences have been granted for the export of all piece goods produced from wool allocated for that purpose. The arrangements for the control of exports of woollen piece goods are well known to the trade, and loyally accepted by them. The total available for export is now barely sufficient to meet minimum Empire requirements. The policy of His Majesty's Government on this matter is to give priority to the essential needs of the home market and of the Empire.

Oral Answers to Questions — REFUGEES (INTERNATIONAL ACTION)

Mr. Sorensen: asked the President of the Board of Trade whether the British


delegates to the International Relief Conference intend to urge the formation of a supreme economic council to co-ordinate the different policies of the eight combined boards for the purpose of simplifying negotiations with other international bodies in process of formation or contemplated?

The Under-Secretary of State for Foreign Affairs (Mr. George Hall): I have been asked to reply. I fear that it would hardly be within the competence of the Council of the United Nations Relief and Rehabilitation Administration to put forward such far-reaching proposals as those indicated by my hon. Friend.

Mr. Sorensen: Seeing that there is a prima facie case made out for the co-ordination of these Boards, could not some other action be taken to see whether such co-ordination could be effected?

Mr. Hall: That is another question.

Mr. Sorensen: asked the President of the Board of Trade what will be the relationship between the Inter-Governmental Committees on Refugees and the Repatriation Committee of the United Nations Relief and Reconstruction Administration which will be set up at the forthcoming International Conference on Relief; and whether it is intended that the League of Nations Commission for Refugees shall be invited to co-operate with both?

Mr. Hall: The Executive Committee of the Inter-Governmental Committee on Refugees has recommended that, in order to avoid overlapping the proposed United Nations Relief and Rehabilitation Administration should be responsible for maintenance of refugees in areas where it will operate, if it is prepared to undertake this task. The recommendation is down for consideration at the international conference on relief about to assemble in the United States. I cannot anticipate the results of their discussion, but from what I have said it will be clear that the question of co-ordination is receiving all due attention. In regard to the League of Nations High Commission for Refugees, I would point out that co-ordination is already assured by the fact that the High Commissioner is also Honorary Director of the Inter-Governmental Committee.

Mr. Sorensen: Would the right hon. Gentleman also indicate whether the Com-

mission as such apart from personnel will be co-ordinated in some organic way?

Mr. Hall: I think that is a matter which might be considered. It must be remembered that the Inter-Governmental Committee have only recently been set up. They are already getting on with their job and doing it very well.

Earl Winterton: Would the right hon. Gentleman correct something in the statement he has just made? The Committee has not only recently been set up, it has only recently had its duties extended.

Mr. Hall: Yes, that is so. There was a recommendation from the Bermuda Conference that the mandate of the Inter-Governmental Committee should be extended and that the Inter-Governmental Committee should be called together for the purposes of carrying on their functions in accordance with the extended mandate.

Oral Answers to Questions — SWEDISH BALL AND ROLLER BEARINGS (EXPORT TO GERMANY)

Sir Arnold Gridley: asked the Parliamentary Secretary to the Ministry of Economic Warfare whether he has any information as to Germany being supplied with ball and roller bearings from factories in Sweden; and whether any pressure has been brought to bear upon the Swedish Government to prohibit such supplies?

The Parliamentary Secretary to the Ministry of Economic Warfare (Mr. Dingle Foot): Yes, Sir. A large part of the output of Sweden's ball and roller bearing industry is absorbed in meeting the requirements of Sweden's national defence forces. The surplus is available for sale to other countries, including Germany. The requirements in bearings of the United Nations are, however, extensive, and large scale orders have accordingly been placed with Swedish manufacturers. My information is that as a result Sweden's productive capacity of the more important types of bearings is fully booked up for some time ahead, and it is therefore unlikely that enemy purchases of this type will appreciably increase. As regards the second part of the Question, matters of this kind are frequently the subject of communications between His Majesty's Government and neutral Governments, but it would not be in the public interest to reveal the nature of such communications.

Oral Answers to Questions — BRITISH PRISONERS OF WAR, ITALY

Mr. Driberg: asked the Secretary of State for War how many British prisoners of war in Italy have been able to join the advancing Allied Forces; and whether he will request the Protecting Power to ascertain whether any further transfers of prisoners from Italy to Germany are now taking place?

Captain Gammans: asked the Secretary of State for War whether he can make any statement with regard to the number of prisoners in Italy who have been removed to Germany and the numbers who have escaped or who have found their way to Switzerland?

Major-General Sir Alfred Knox: asked the Secretary of State for War how many British prisoners have now reached Switzerland from Italy; whether their relations in this country have been notified without delay; and whether the Protecting Power or the International Red Cross is looking after them financially and otherwise?

The Secretary of State for War (Sir James Grigg): I would refer the hon. Members to the replies I gave to my hon. and gallant Friend the Member for Lewes (Rear-Admiral Beamish) on 26th October and to my hon. Friends the Members for Stockport (Wing-Commander Hulbert) and Plaistow (Mr. Thorne) on 12th October. I am, however, circulating in the OFFICIAL REPORT information which has been forwarded by the Protecting Power about the camps in Germany to which prisoners transferred from Italy have been sent. Arrangements are made by His Majesty's Minister and the Swiss Government for the accommodation, clothing, feeding and welfare of British prisoners who reach Switzerland and for advances of pay for them.

Mr. Driberg: Can the right hon. Gentleman further say whether there has been any speeding-up of communications between the Protecting Power and the War Office, which were at one time very slow?

Sir J. Grigg: If the hon. Member wishes to make that particular accusation, perhaps he will put down a Question, and I will answer it.

Captain Gammans: Are there any instances of our prisoners having been prevented by the Italian authorities from escaping after the Armistice terms had been signed?

Sir J. Grigg: I should require notice of that Question. The only case I have in mind at all in that connection is one to which the Minister of State referred in an answer a few days ago. If the hon. and gallant Member will put down a Question, I will try to get him the information.

Sir A. Knox: Have the relatives of those prisoners who have escaped into Switzerland been informed?

Sir J. Grigg: Yes, Sir.

Sir A. Knox: Can the right hon. Gentleman tell me the number?

Sir J. Grigg: As I have previously said, I would rather be excused from giving any information about the number who have escaped.

Major Petherick: Will the right hon. Gentleman bear in mind that it would be dangerous to give the figures of prisoners who have escaped across the frontier, as it would clearly tell the Germans how many they had to look for?

Sir J. Grigg: That is precisely the consideration which I had in mind.

Following is the information:

The Protecting Power reports that the Transit Camps in Germany being used for prisoners of war from Italy are Stalag VII A, Stalag XVIII A and Stalag XVIII C, from which officers are sent to Oflag XII B and Oflag V A, and other ranks to Stalag IV B, Stalag VIII A and Stalag VIII B. British officers, whom it has not yet been possible to accommodate in Qflags, owing to lack of space, are temporarily accommodated in these Stalags. All these camps will be visited by the Protecting Power during October and November.

Oral Answers to Questions — BRITISH ARMY

General Headquarters, M.E.F. (Staff)

Mr. Turton: asked the Secretary of State for War what reduction has taken place in the staff of general headquarters, M.E.F.?

Sir J. Grigg: The strengths of this and other headquarters are reviewed from time to time, and whatever reductions are possible are made. My hon. Friend will, however, appreciate that, as the staff of a headquarters is related to the present and future operational requirements in the theatre of war concerned, it would be of value to the enemy to make public details of changes in the strength of this or other headquarters.

American Tanks

Mr. Hammersley: asked the Secretary of State for War whether he is aware of the large number of American Sherman tanks lying unused in this country; and whether he will arrange to equip British units with these tanks in preference to less reliable British tanks?

Sir J. Grigg: The American tanks in this country are intended for the equipment of British Forces or for the accumulation of the necessary reserves. Naturally I do not propose to give information about the equipment of British formations which might be of value to the enemy but I may say that I do not accept the implications of either part of the hon. Member's Question.

Mr. Hammersley: Is the right hon. Gentleman aware that the large numbers referred to in the Question are arrived at after making allowances for reserves on the most generous scale, and am I to understand that there are not sufficient armoured units to be furnished with these American tanks?

Sir J. Grigg: The hon. Member is repeating the implication which I expressly refused to accept, namely, that there are tanks in this country which are being wasted.

Mr. Stokes: May I ask the right hon. Gentleman whether we are to infer that he is satisfied that the British tanks in use in this country are better than the Sherman tanks?

Sir J. Grigg: Perhaps the hon. Gentleman will put that question down.

Home Guard

Mr. William Brown: asked the Secretary of State for War whether a member of the Home Guard is in any way prohibited from communicating with

Members of Parliament; and what are the regulations dealing with this matter?

Sir J. Grigg: I am not aware that there are any regulations which prohibit Home Guards from communicating with Members of Parliament.

Mr. Brown: If I bring to the attention of the Secretary of State a case where a Home Guard was recently reprimanded by his commanding officer for communicating with a Member of Parliament, will he be kind enough to look into it?

Sir J. Grigg: Certainly, Sir.

Major Manningham-Buller: asked the Secretary of State for War what nurnber of Regular officers, under 35 years of age and medical category A, are now employed as Home Guard training officers?

Sir J. Grigg: Five, Sir.

Mr. Naylor: asked the Secretary of State for War whether he is aware of the dissatisfaction prevailing among all ranks of a certain battalion of the Home Guard, of which he has been informed, which has resulted in the resignations of three company commanders and three junior officers, and applications from 18 non-commissioned officers to be allowed to resume their former position in the ranks; and whether he will make a statement as to the steps to be taken to restore the confidence of officers and men in the higher command?

Sir J. Grigg: An investigation into these matters is now being carried out.

Mr. Glenvil Hall: asked the Secretary of State for War whether the recent instruction that Home Guard boots needing repair must be sent to one centre in each area applies universally to all districts?

Sir J. Grigg: I am not aware that such an instruction has been issued, but if my hon. Friend will let me have particulars of it I will have inquiries made.

Mr. Hall: Am I to understand that certain instructions can be issued without the War Office knowing about it?

Sir J. Grigg: A certain amount of latitude must be allowed to local commanders. If the hon. Member will give me particulars of instructions having been wrongfully issued, I will look into the matter.

Defence of Egypt (Casualties)

Mr. Leach: asked the Secretary of State for War how many British lives were lost in the defence of Egypt; what active military help was rendered by the Egyptian authorities; and how many Egyptian lives were lost in the defence of their country?

Sir J. Grigg: The defence of Egypt itself was an integral part of all the operations conducted in the Middle East against the Axis and cannot be isolated therefrom so that the specific information asked for by my hon. Friend cannot be given. The Egyptian Government fulfilled their obligations under the Anglo-Egyptian Treaty of 1936.

Mr. Leach: Can the right hon. Gentleman affirm that the Egyptian Government faithfully did its duty in protecting its country and risking the lives of its citizens in its defence?

Sir J. Grigg: The answer I gave was that they fulfilled their obligations under the Treaty of 1936.

Mr. Astor: Is the right hon. Gentleman aware that the Egyptian Army gave invaluable help in the defence of the Canal and at Alexandria?

Sir J. Grigg: Yes, Sir.

Overseas Entertainment

Major Nield: asked the Secretary of State for War what increase there has been in recent months of mobile cinemas available for the entertainment of the Forces serving overseas?

Sir J. Grigg: Since 1st July, 52 additional mobile cinemas have been provided by the Army for showing entertainment, educational and training films to the Forces overseas. A further 50 will be provided before the end of the year.

Major Nield: While thanking my right hon. Friend for his reply, might I ask whether there is not some difficulty by reason of divided responsibility between E.N.S.A. and the Army entertainment service? Would it not be better to bring the whole thing under the control of the Army?

Sir J. Grigg: That matter, as I said in reply to other hon. Members, is engaging my attention. Not only is there divided responsibility at present, but there are many divided opinions.

Mr. Evelyn Walkden: Would the suggestion of the hon. and gallant Member not lead to waste of man-power? Is there any lack of co-operation on the part of the Army in this matter?

Sir J. Grigg: On the last part of the Question, which is the relevant one, the answer is quite definitely, No.

Major Nield: asked the Secretary of State for War whether he is satisfied that E.N.S.A. and similar organisations are providing the maximum of entertainment possible for the Forces serving overseas; and, if not, whether he will take steps to improve the position?

Mr. Hewlett: asked the Secretary of State for War whether, in view of criticism of the arrangements by E.N.S.A. for the entertainment of the troops overseas and the fact that many professional stars are giving little or no assistance, he will investigate the possibilities of improvement in their programmes?

Sir J. Grigg: The War Office and the other two Services are doing all that they can, in conjunction with E.N.S.A., to secure the improvement for which my hon. Friends look.

Mine-Clearing Devices, Italy

Mr. Stokes: asked the Secretary of State for War whether the Forces fighting in Italy are now equipped with an effective mine-clearing tank; and, if so, whether he will state the type?

Sir J. Grigg: Our Forces in Italy are equipped with the best mine-clearing devices available, but it would clearly not be in the public interest to give particulars of them.

Mr. Stokes: Has the right hon. Gentleman read General Alexander's statement that "all roads lead to Rome, but unfortunately all the roads are mined"? Is one to infer that mine-clearing equipment is totally inadequate?

Sir J. Grigg: No, Sir.

Mr. Stokes: It is certainly so.

Service Wives

Mr. Burke: asked the Secretary of State for War whether he will make the Regulations regarding married personnel in the same camp similar to those in the R.A.F., so that married couples need not be separated?

Sir J. Grigg: I am afraid that my answer on 19th October may have misled my hon. Friend. The Army rule forbids married couples serving in the same unit; it does not forbid them serving in the same camp if both their units happen to be there. This seems to me a reasonable rule in the circumstances, particularly as the conditions of service in the Army are not in general very similar to those in the R.A.F.

Mr. Burke: Does my right hon. Friend realise that this Regulation is not conducive to the best human relations between people serving in the same locality? Why should Army Regulations generally be more harsh than those of the R.A.F.?

Sir J. Grigg: I do not admit that Army Regulations are invariably stricter—

Mr. Burke: I said "generally."

Sir J. Grigg: —or harsher than those of the R.A.F. The suggestion that this rule is conducive to ill-feeling is I think incorrect. I may have misled my hon. Friend. In the case of two different units in the same camp the rule does not operate. If my hon. Friend will consider the matter it is possible that he will see that there are good reasons for the rule.

Mr. Bellenger: Will my right hon. Friend see that where two people get married they are posted to the same locality even if not to the same unit? In many cases when a couple marry they are dispersed to opposite ends of the Army.

Sir J. Grigg: If a man and a woman in the same unit marry quite obviously one of them must change their unit. I do not think that there is any deliberate policy of posting them as far apart as possible.

Mr. John Dugdale: What special reasons apply to the Army which do not apply to the R.A.F.?

Sir J. Grigg: That is obvious. Some of the mixed Army units have an operational function, which R.A.F. units have not.

Requisitioned Land (Reinstatement)

Major Leighton: asked the Secretary of State for War whether buildings erected on land requisitioned by his Department will be cleared away before handing back the land to the owner?

Sir J. Grigg: The Compensation (Defence) Act, 1939, prescribes only an obligation to pay compensation in respect of the cost of reinstatement, and in general I regret that I am unable to give any guarantee on the method by which reinstatement will be carried out during or after the war. Where, however, the removal of works serves an essential wartime purpose, for example, by restoring the land to food production, every effort is made to do it.

Major Petherick: Are we to understand that it is possible that the War Office might well erect immense Moorish castles and then leave it to the owners of the land to clear them away?

Mr. Gallacher: Why should the War Office hand back the land to the robber landowners instead of to the people to whom it belongs?

Mr. Godfrey Nicholson: Why should not the land be handed back to the legitimate owners?

Oral Answers to Questions — COMBINED SERVICES ADVISORY BUREAU

Mr. Astor: asked the Secretary of State for War whether the Combined Services Advisory Bureau, of 8, Hazlewood Court, Victoria Rise, Clapham, S.W. 1, has any official recognition as a war charity; whether it is registered as such; and whether he has any information concerning its activities?

Sir J. Grigg: As far as I am aware, the answer to the three parts of my hon. Friend's Question is "No, Sir."

Mr. Astor: In view of the fact that this organisation is circularising ex-Service men who have had accidents, on paper with a heading which makes it look as though it is an official charitable organisation, will the right hon. Gentleman consult with the appropriate Government Department as to whether they can take steps to prevent this from going on?

Sir J. Grigg: I believe my information is correct that it is not a Government Department at all which is responsible for dealing with that particular matter, but the London County Council.

Earl Winterton: Is it not the case that under the Charities Act the Home Office is certainly responsible, and will he in all


these cases communicate with the Home Office, where there is reason to believe that ex-Service men or their dependants are being victimised?

Sir J. Grigg: My knowledge is not deep enough to challenge the Noble Lord's statement, but I am informed that the people primarily responsible are the L.C.C., but I will pass on the suggestion to the Home Office.

Mr. Gallacher: Will the right hon. Gentleman not make adequate provision for ex-Service men and their dependants and do away altogether with charity? Is it not a shameful thing that there should be charity?

Oral Answers to Questions — MISSING PERSONNEL (SEARCH ORGANISATION)

Mr. Graham White: asked the Secretary of State for War whether the Report on the Organisation for Searching for the Missing has now been received?

Sir J. Grigg: I understand it was reported last August to the War Organisation of the British Red Cross Society and Order of St. John, by their Commissioner in Cairo, that he was satisfied with the progress of searching work in the Middle East, having regard to the necessary restrictions on transport and on accommodation in hospitals.

Mr. White: Is this Report the one which my right hon Friend promised to cable at the end of July?

Sir J. Grigg: I do not remember saying that I would cable. The normal machinery would be for the Red Cross people in Cairo to report to their own organisation and that is what has been done. This is the only Report that I am aware of. What I undertook was to pass on any information which I got to the Red Cross.

Mr. White: Will the right hon. Gentleman be good enough to look at the reply which he gave at the end of July in which he promised to cable the Report?

Oral Answers to Questions — CIVILIAN DEATHS, AIR RAIDS

Mr. Rostron Duckworth: asked the Secretary of State for War whether the War Graves Commission accepts any re-

sponsibility for the maintenance of the graves of British people killed at home by enemy air raids?

Sir J. Grigg: No, Sir. But the Commission is empowered to record the names of civilians killed in air raids.

Oral Answers to Questions — ITALIAN PRISONERS OF WAR (EMPLOYMENT)

Wing-Commander Hulbert: asked the Secretary of State for War whether he will now give further consideration to the employment of Italian prisoners of war in industry?

Mr. Tomlinson: I have been asked to reply. As stated in the reply to the hon. and gallant Member for Wycombe (Sir A. Knox) on 14th October, this matter is under consideration.

Wing-Commander Hulbert: Can the hon. Gentleman say when decisions will be reached?

Mr. Tomlinson: No, Sir.

Commander Locker-Lampson: Will the hon. Gentleman look into the question of whether or not we are going to employ German prisoners?

Oral Answers to Questions — WAR DESPATCHES

Mr. Bellenger: asked the Prime Minister why only two despatches out of 27 received from commanders-in-chief in the field have been published?

The Deputy Prime Minister (Mr. Attlee): His Majesty's Government consider that the publication of further despatches would give information of value to the enemy.

Mr. Bellenger: Why did not these Instructions apply during the last war, when all the despatches of the Army chiefs were published within a few months of their receipt by His Majesty's Government?

Mr. Attlee: I have responsibility only for this war. I cannot say why the same course was not adopted in the last war.

Mr. Bellenger: But is it really the case that the despatches of the commanders-in-chief would give information to the enemy? Would they not rather give information to our own people?

Mr. Attlee: I have stated that, in the opinion of His Majesty's Government, they would be of service to the enemy.

Oral Answers to Questions — BURMA (CIVIL ADMINISTRATION, REPORT)

Mrs. Tate: asked the Prime Minister whether the despatches from Sir Reginald Dorman-Smith from Burma will be published as a White Paper?

Mr. Attlee: I understand that a report on the civil administration of Burma during the Japanese invasion has been completed. When it is received, the question of the action to be taken on it will be considered.

Oral Answers to Questions — MILITARY COMMENTATORS

Sir William Davison: asked the Prime Minister whether his attention has been called to the military commentaries on Allied operations and possible future plans of attack by officers who have held high military appointments which are appearing in the Press; and, as it is not in the national interest that well-informed criticism and suggestions should be made available to the enemy, whether he will take steps to stop this practice?

Mr. Attlee: The officers to whom my hon. Friend refers are no doubt those retired officers of the Services who are employed as military commentators by some newspapers. As retired officers they have no access to official plans and papers. Breaches of security will be dealt with in the normal way.

Sir W. Davison: Is not an officer of such rank necessarily a man of responsibility, whose opinion on military matters is of value? Is it not likely to be of assistance to the enemy to have their opinions on our plans confirmed from a responsible source?

Mr. Attlee: I do not think that in this case any opinions are formed for the enemy which he could not have formed for himself.

Earl Winterton: Will the right hon. Gentleman resist in every possible way the encroachment of the freedom of the Press advocated by the hon. Gentleman opposite?

Mr. Molson: Is it not the case that these articles, like other articles in the Press, are submitted voluntarily to the Ministry of Information, for voluntary censorship?

Mr. Attlee: I think that that is so, and if there was any exception in any way, some action would be taken.

Oral Answers to Questions — BRITISH TROOPS, INDIA (WELFARE AND ADMINISTRATION)

Mr. Bellenger: asked the Prime Minister whether in view of the establishment of a Far Eastern Command, the Secretary of State for War is to be given any direct responsibilty for the welfare and administration of British Forces serving in India?

Mr. Attlee: The Commander-in-Chief, India, is directly responsible for the welfare and administration of British troops serving in India and the Supreme Commander, South East Asia Command, for that of the British troops serving under him. The Secretary of State for War is responsible to Parliament in the second case. In the first case it is the Secretary of State for India who is so responsible but clearly the Secretary of State for War has a general interest in seeing that British troops are adequately cared for.

Mr. Bellenger: Can the right hon. Gentleman say whether Questions affecting the welfare and administration of British troops in India can be addressed to the Secretary of State for War and receive an answer, because under the present arrangement it is not satisfactory to put these Questions to the Secretary of State for India, who then has to cable out to the Viceroy or something like that?

Mr. Attlee: Clearly, my hon. Friend should put down his Questions to the Minister who is responsible to this House.

Oral Answers to Questions — DEMOBILISATION PLANS

Major Nield: asked the Minister without Portfolio whether he will give an undertaking that in any plan for demobilisation a substantial period of service in the Armed Forces overseas should be rewarded by a measure of priority?

Mr. Douglas: asked the Minister without Portfolio what progress has been made in settling the principles upon


which the men and women in the Forces will be demobilised; and what steps will be taken to familiarise them with these principles in order to ensure co-operation and smooth working of the plan?

The Minister without Portfolio (Sir William Jowitt): I would refer my hon. Friends to the reply that I gave on 23rd September last to Questions by my hon. Friends the Members for Stockport (Sir A. Gridley) and Bassetlaw (Mr. Bellenger). The general re-examination of the demobilisation plan, to which I then referred, is proceeding. On its completion decisions will be taken by the Government and communicated at the proper time to the House with a view to a discussion of the whole matter.

Mr. Molson: Is my right hon. and learned Friend aware of the widespread interest in the country to know the general principles and priorities of demobilisation policy, and will he therefore apply to this problem those qualities of drive and energy with which he is so plentifully endowed?

Sir W. Jowitt: I am well aware of the points the hon. Member has made and of the desirability of getting a decision, but, on the other hand, I think he will realise, too, that there is another consideration. A suitable time to discuss these matters must to some extent depend upon the progress of the war, and therefore there is the matter of time governing what shall be done.

Mr. Shinwell: Is the Minister aware that the men in the Forces are apprehensive on this matter, and is it not possible for the Government to distinguish as between a declaration on the principles concerned and the details? Could we have a statement on the principles affecting demobilisation at an early stage?

Sir W. Jowitt: No, Sir. It is very difficult to separate the principle from the details. A discussion in this House would not be of any value unless there was a considerable measure of detail given.

Oral Answers to Questions — NATIONAL FINANCE

Artificial Limbs (Income Tax Deduction)

Mr. Gallacher: asked the Chancellor of the Exchequer whether he will consider

allowing the cost of artificial limbs to rank for Income Tax deduction in the case of civilians who have lost a limb?

The Chancellor of the Exchequer (Sir John Anderson): I am afraid that I cannot accept the hon. Gentleman's suggestion.

Mr. Gallacher: Is the Chancellor aware of how heavily handicapped these civilian cripples are and of the heavy burden of keeping up their payments? Surely consideration should be given to a simple matter of this kind?

Sir J. Anderson: I am not unsympathetic to the point of view put forward, but I am bound to tell the House that the particular method of giving the assistance suggested is open to strong objection from the Revenue point of view.

University Grants Committee

Mr. Edmund Harvey: asked the Chancellor of the Exchequer how often the University Grants Committee has met during the last six months; and whether, in view of the urgency of the equipment of the universities to deal with the post-war situation, steps are being taken by the committee to formulate appropriate plans?

Sir J. Anderson: The reconstitution of the University Grants Committee has been under consideration for some time and I hope very shortly to announce the appointment to the Committee of a number of new members. Pending its reconstitution, meetings of the Committee have not recently been held. As regards the equipment of universities to deal with the post-war situation, the universities themselves have been studying the various problems which will face them after the war. The Committee of Vice-Chancellors and Principals have asked the University Grants Committee to undertake a review of these problems in order to form a considered estimate of the need for increased assistance from the Exchequer. This request will have to be considered as a matter of urgency by the reconstituted Committee; meantime, the universities are being asked to formulate their post-war needs so far as they can be estimated in present circumstances.

Mr. Harvey: Can the right hon. Gentleman say whether the universities are


being asked individually to formulate their needs, or is it to be done through the Committee of Vice-Chancellors and Principals?

Sir J. Anderson: I am not sure, but I think it is through the Committee.

Ground Rents (Income Tax Deductions)

Sir William Wayland: asked the Chancellor of the Exchequer the reason for the inequality arising from the rule of the Inland Revenue which permits, in the case of a private company owning ground rents, the deduction of expenses of collection and management before payment of Income Tax, whereas such deduction is not allowed when similar ground rents are owned by an individual, although he will have to incur an equal expense; and whether he will consider remedying this?

Sir J. Anderson: The relief to which my hon. Friend refers is allowed under a provision of the law, namely, Section 33 of the Income Tax Act, 1918, which is applicable only to companies. I am afraid that I cannot see my way to an extension of that provision to the case of the individual who incurs expenses in collecting his income from ground rents or other investments.

Sir W. Wayland: Can the Chancellor say what is equitable? Is it equitable in the one case to give a certain amount of rebate and not in the other case, which is similar on all points?

Mr. MacLaren: Why not take them away from them altogether?

Sir J. Anderson: In the case of companies, it is treated as a matter of business and ranks as business expenses. On the point put by my hon. Friend, the law does draw a distinction in other respects between companies and private individuals.

Monetary and Currency Policy

Mr. Quintin Hogg: asked the Chancellor of the Exchequer the nature of the agreement in principle between the United Kingdom and the United States of America referred to by Mr. Morgenthau, on 26th October, 1943?

Mr. Stokes: asked the Chancellor of the Exchequer whether he has any statement to make to this House, in view of Mr. Morgenthau's announcement in

Cairo on 26th October, that Great Britain and the United States had agreed in principle with regard to the implementation of the Keynes and White plans for world stabilisation?

Mr. Shinwell: asked the Chancellor of the Exchequer the nature of the agreement in principle between the delegation to the United States of America and the United States representatives?

Sir J. Anderson: I have seen references in the Press to a statement attributed to Mr. Secretary Morgenthau. The exploratory discussions between officials which were recently concluded in Washington have made an appreciable advance towards agreement on principles, though there are still some important points outstanding. The full report of these discussions has not yet reached me and tae position remains as it has been stated by the late Chancellor and myself, that no commitment in this field will be entered into without previous debate in this House.

Mr. Stokes: Can the Chancellor say whether the statement in the Press of last Wednesday is without foundation?

Sir J. Anderson: I cannot do better than refer the hon. Gentleman to what my right hon. Friend the Prime Minister said on that subject last week.

Mr. Shinwell: May I ask the Chancellor whether the delegation, with which Lord Keynes was associated and which went to the United States of America to discuss these matters, were empowered to come to an agreement in principle, or was their reference merely to discuss the matter in an exploratory fashion?

Sir J. Anderson: That is so. There was no power given to anyone on either side to arrive at agreement in principle. The word "agreement" in my answer must be interpreted again, as the Prime Minister indicated, as a union of minds rather than a bond.

Mr. Boothby: Will the Chancellor, before we have a Debate, consider laying a further White Paper for the guidance of the House, giving a general outline of the scope of the discussions and the proposals of His Majesty's Government?

Sir J. Anderson: It will not be practicable to lay a White Paper dealing specfically with the discussions which have


taken place between technical experts on both sides, but I will certainly consider publishing material as far as it is relevant to the views of His Majesty's Government.

Lend-Lease

Mr. Stokes: asked the Chancellor of the Exchequer whether, in view of President Roosevelt's declaration that nations benefiting under Lend-Lease will be expected to make repayment after the war in goods or other benefits, he will now cause to be recorded the value of goods already sent to America by Great Britain under Lend-Lease?

Sir J. Anderson: I have nothing to add to my reply to the hon. Member on 26th October last.

Mr. Stokes: That was a reply to a totally different question to the question of the amount of American Lend-Lease in this country. I am now asking whether, in view of the President's statement that the countries which receive the benefits of Lend-Lease will be expected to repay, if not in kind, in goods or other benefits, he will now cause the amount of Lend-Lease in reverse to be recorded?

Sir J. Anderson: I explained to the hon. Gentleman the difficulty of making an exact record in terms of money of the value of goods and services, whether under Lend-Lease or what we call reciprocal union.

Mr. Stokes: How does the right hon. Gentleman propose to deal with the matter when the President sends in his bill?

Sir J. Anderson: I think we had better wait.

Dr. Russell Thomas: Does not the right hon. Gentleman consider that public controversy as to which of the Allies has been of the most material help to the War is undesirable at this juncture, and should not these matters be left to the several Governments concerned?

Sir J. Anderson: Certainly, I myself wish to avoid all unnecessary controversy.

Research (Taxation Relief)

Mr. Ralph Etherton: asked the Chancellor of the Exchequer whether any specific attention and investigation are

being given by his Department to the practicability of relief from taxation of industrial research by making the costs of such research and development work, including the cost of patents, proper charges against taxable profits?

Sir J. Anderson: As explained by the Financial Secretary in his speech during the Second Reading of this year's Finance Bill (OFFICIAL REPORT, 18th May, 1943, col. 1070), revenue expenditure on research is generally allowed as a deduction in computing profits, and the case of capital expenditure is one of the matters for consideration in the inquiry now being carried out by the Board of Inland Revenue into the treatment of expenditure for taxation purposes.

War Damage Contribution

Sir Frank Sanderson: asked the Chancellor of the Exchequer whether, in view of the decline which has taken place in the destruction of property by air raids, he will consider the reduction of the insurance premium paid by the owners of property?

Sir J. Anderson: No, Sir. I would draw my hon. Friend's attention to the fact that the contribution now payable is that prescribed in the original War Damage Act in respect of damage done within the first risk period ending 31st of August, 1941, only; and that this risk period was extended indefinitely by subsequent legislation without any addition to the contribution. Provisions for its ultimate adjustment either upwards or downwards if that should be necessary are laid down in Section 80 of the War Damage Act, 1943.

War Damage Insurance Fund

Sir F. Sanderson: asked the Chancellor of the Exchequer the amount of the War Damage Insurance Fund collected to 30th September last?

Sir J. Anderson: I would refer my hon. Friend to the answer my predecessor gave to the hon. Member for Southampton (Mr. Craven-Ellis) on 22nd June.

Sir H. Williams: Can my right hon. Friend say how much the Exchequer has put into the Fund up to date?

Sir J. Anderson: Statements are made to the House from time to time, and I think it is much more convenient that


that should be done at appropriate intervals rather than that I should attempt to make a running commentary.

Sir H. Williams: I want to know whether it is still nothing.

Injured Civil Servants (Pay Increments)

Mr. W. Brown: asked the Chancellor of the Exchequer whether he will issue instructions to provide that when civil servants are injured by enemy action while on duty and as a result of such injuries prolonged sick absence is necessary, they shall not as a result of such absence lose any right to increments in pay to which they would otherwise be entitled, but that they shall be accorded the same privilege as civil servants serving in His Majesty's Forces who, when wounded, continue to receive incremental credit?

Sir J. Anderson: The question of loss of increments only arises after the civil servant has had long paid sick leave which may amount to as much as a year in any period of four years. His position in this respect is precisely the same as that of a civil servant who has been invalided out of the Forces, is back on the payroll of his Department but is still unfit for civilian duty.

Oral Answers to Questions — DUTCH-BELGIAN-LUXEMBOURG MONETARY AGREEMENT

Mr. Mander: asked the Chancellor of the Exchequer whether he has any statement to make with reference to the Dutch Belgian Pact; and whether its extension to other countries is contemplated?

Sir J. Anderson: I have, naturally, been kept informed about the Dutch-Belgian-Luxembourg Monetary Agreement and am glad to have this opportunity to say with what great satisfaction His Majesty's Government regard its conclusion. The Agreement is undoubtedly a most constructive step. It gives practical proof of the effective and close co-operation between Allied Governments established temporarily in this country and will form a most helpful basis for the re-establishment of economic relations in Europe after the war.

Mr. Mander: Can the right hon. Gentleman say whether any and what other countries are considering adherence, and whether that includes this country?

Sir J. Anderson: I am not in a position to say anything on that point.

Oral Answers to Questions — UNITED KINGDOM COMMERCIAL CORPORATION (DISMISSALS)

Mr. Evelyn Walkden: asked the Chancellor of the Exchequer whether he will investigate the powers of dismissal exercised by certain directors and high officials of the United Kingdom Commercial Corporation, and with particular reference to Lord Carlisle, chief representative of the corporation in Turkey, who was dismissed after a successful mission, also Mr. Lynch, an officer of the Corporation in Spain, drawing a salary and allowances of £1,500 per annum, who was recalled from Madrid and dismissed because he complained that for 12 weeks he had nothing to do; and whether he will announce his findings?

Sir J. Anderson: No, Sir, decisions of this nature are within the competence of the Board of the Corporation.

Mr. Walkden: Is not a public inquiry into the affairs and administration of this Corporation absolutely essential and long overdue? Will the Minister make arrangements for such an inquiry?

Sir J. Anderson: That goes far beyond the limits of the Question, but I certainly do not see anything in the information that has come into my possession which establishes a prima facie case for such an examination.

Sir Irving Albery: Does my right hon. Friend's answer accept the implication in the last part of the Question, namely, that an official was dismissed because he complained that for 12 weeks he had nothing to do?

Sir J. Anderson: I do not accept that implication at all.

Oral Answers to Questions — WAR SAVINGS POSTERS, NELSON'S COLUMN

Lady Apsley: asked the Chancellor of the Exchequer whether his attention has been called to the War Savings posters surrounding the plinth of Lord Nelson's column in Trafalgar Square, which portray large Union Jacks defaced by the addition of a gold and silver star in the top right-hand corner; what is


represented by this heraldic device; and who has authorised this change in the flag of the United Kingdom of Great Britain and Northern Ireland?

Sir J. Anderson: I have seen the posters to which my Noble Friend refers; the device has no heraldic significance, and the question of authority does not arise. The National Savings Committee have decided that in any posters produced in the future the star shall be separated from the flag.

Lady Apsley: Is my right hon. Friend aware of the great concern of those interested in heraldry at this unauthorised change in our national flag? Can he give the House his assurance that this new device does not portend any unauthorised change in our national financial policy?

Sir J. Anderson: I should be very sorry, as, I am sure, would the Savings Committee, if pain had been caused to anyone. I said in my answer that what was produced and displayed has no heraldic significance whatever.

Mr. Austin Hopkinson: Is the right hon. Gentleman aware that there is no such thing as heraldic authority and that the whole thing is a complete ramp?

Lieut.-Colonel Sir Assheton Pownall: Has the introduction of these stars any Lend-Lease significance?

Sir J. Anderson: No, Sir.

Mr. Gallacher: Would the Minister see that these stars are transferred to North Africa, where they are in great demand?

BUSINESS OF THE HOUSE

Mr. Arthur Greenwood: May I ask the Deputy Prime Minister whether he can make a statement on the course of Business to-day, and how far it is proposed to go?

Mr. Attlee: We desire to get the Wage-earners' Income Tax Bill and the Price Control (Regulation of Disposal of Stocks) Bill [Lords] to-day and to make some progress, if we can, with the Water Undertakings Bill [Lords]. To meet our purpose we wish to ask the House to sit late, and I propose, therefore, to move the suspension of the Rule.

Mr. Levy: Do I understand that the Water Undertakings Bill is coming on to-day and not on the fourth day of this series of Sittings?

Mr. Attlee: It is hoped to make progress with it to-day and also on the fourth day of the present series of Sittings.

Mr. R. C. Morrison: Does my right hon. Friend appreciate that the Water Undertakings Bill is a highly controversial Measure, in which many Members are keenly interested and have had no notice that this Bill would come on again today? The latest information we had was that it would be taken on the fourth Day of this series of Sittings, and in these circumstances does he think it is quite fair, in view of the fact that this is not a party Measure and that issues of great importance are involved, to spring it on the House like this?

Mr. Attlee: My hon. Friend will realise that the Second Reading was not obtained last week and that it will, therefore, be a continuation of the Second Reading discussion. The highly technical points will largely come up on the Committee stage, but we hope to make some progress to-day with the Second Reading.

Sir H. Williams: Do I understand that it is proposed to have the Second Reading Debate at odd times during the next fortnight?

Mr. Attlee: No, Sir.

Mr. Levy: The Water Undertakings Bill is bound to come on very late. It was arranged to come on on the fourth Day of the present series of Sittings, and would it not, therefore, be better for all concerned that it should come on on that day, particularly as the Bill is involved, technical and of a highly controversial nature?

Mr. Attlee: I gathered that Members had stated that they wanted plenty of time. If we can find time for the Bill to-day without being unreasonably late, I think we might well do so.

Mr. Molson: Is it the intention of the Government to have the Second Reading to-day and then to move that the Bill should be committed to a Committee of the Whole House?

Mr. Attlee: No, Sir, I have said twice that we want to make such progress as we can.

Mr. R. C. Morrison: Would my right hon. Friend give some further attention to this extraordinary procedure of beginning the Second Reading of a Bill of this nature in such a short time as was available last week, when there was only time for the Minister to make his introductory speech?

Mr. Attlee: We will do what we can, but my hon. Friend must know how difficult it is to foretell exactly the course of Business. We would not like to leave hon. Members' time unoccupied through not putting down enough Business.

Mr. Ralph Etherton: If the Second Reading of this Bill is to be continued to-day, will the Minister give an undertaking that it will not be committed to a Committee of the Whole House to-day, because it is a matter in which a large number of Members are interested?

Mr. Attlee: We should not move to the Committee stage to-day.

Mr. Levy: Am I to understand that this Bill is not to go upstairs but is to be committed to a Committee of the Whole House?

BUSINESS OF THE HOUSE

Ordered,
That the proceedings on Government Business be exempted at this day's Sitting from the provisions of the Standing Order (Sittings of the House)."—[Mr. Attlee.]

Orders of the Day — WAGE-EARNERS' INCOME TAX BILL

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

The Chancellor of the Exchequer (Sir John Anderson): I beg to move, to leave out from the word "be" to the end of the Question, and to add instead thereof:
re-committed to a Committee of the Whole House in respect of the Amendments 'the New Clause (Interpretation) and the New Schedule (Conditions as to Emoluments and Pensions)' standing on the Order Paper in the name of the Chancellor of the Exchequer.
The House will recall that when this matter was debated the week before last, I gave an assurance that I would give careful consideration to the possibility of extending pay-as-you-earn throughout the whole range of Schedule E incomes. I have given, in the interval, very careful consideration to that question, and I have found not unexpectedly that a fresh problem emerges and gains importance as we mount the income scale. That fresh problem arises from the possibility of an adjustment between profits which are assessed under Schedule D and income which is assessed under Schedule E. Such adjustment, which would be quite practicable and quite lawful in a variety of cases, if no special safeguard were applied, might result in the loss of considerable sums of revenue. I will give an illustration in a moment which I hope will make quite clear just how this difficulty arises, but I may first, with advantage, make a few general observations. The first is this, that the possibility of what I may call a tax evading or avoiding adjustment increases in proportion as there is identity of interest between the proprietor of an undertaking and those employed in connection with the undertaking. An extreme case

is, perhaps, the case of the one-man business, and I will take that case for purposes of illustration, and I hope to be able to make the matter perfectly clear.
Let us assume a business in which the managing director, being himself the principal proprietor, normally receives £2,000 a year as dividend from his investments and another £2,000 a year as remuneration. In regard to the dividend on investment, he pays tax on the basis of the previous year. At present, in regard to his remuneration he also pays tax on the basis of the previous year. When we pass to pay-as-you-earn, his position, so far as investment income is concerned, remains the same, but in regard to the remuneration under Schedule E, he will be taxed on the current year. Suppose that in respect of the particular financial year now current, the management of the business and the managing director agree between themselves—they being in fact identical—that for this year there shall be no distribution of dividends but that the remuneration of the managing director shall be increased from £2,000 to £4,000. In respect of the reduction of dividends, the Exchequer loses tax on £2,000. In respect of the personal income of the managing director, the Exchequer does not make a corresponding gain, because as a result of the transition, under pay-as-you-earn, from the previous year's assessment to the current year's assessment, the assessment for this financial year, if the transition takes place at the beginning of the next income year, will result in a Schedule E income for this financial year never being brought into assessment at all, either for Income Tax or for Super Tax. I hope I have made the position clear.

Mr. Bowles: Supposing the managing director is paid on a weekly basis, what will happen?

Sir J. Anderson: If my hon. Friend will forgive me, that is a very special case, which should not be brought up for the purpose of obscuring the argument I am putting. I am dealing with the general aspect of this question in connection with a Motion for the recommittal of the Bill, leading up to my reasons for recommitting the Bill, for the purpose of considering the Amendments on the Paper. I am perfectly prepared


to deal with the case of the high income person who is paid on a weekly basis, but that is different.

Sir Herbert Williams: Surely it is perfectly simple to overcome that case in exactly the same way as the same kind of transaction was overcome in connection with the Excess Profits Tax. In the Finance Bill of 1941 a provision was inserted—slightly amended on my representations—to the effect that if the main purpose of any transaction was the avoidance of tax, the transaction was wiped out. A similar provision would completely meet this case.

Sir J. Anderson: I do not know why the hon. Gentleman interrupts me at this stage before I have completed what I have to say. I have not taken up the time of the House unduly; I am aware of the device to which he has referred, and I shall have to say something in a moment, which is relevant to that point. I gave an illustration explaining how the perfectly lawful avoidance of tax would be facilitated by this. The customary safeguard would not apply, I only want to add this to what I was saying. The average range over which such adjustments would be possible would, in practice, probably be very considerable, because not only are one man businesses directly involved, but any concern in which members of the proprietor's family are employed, might also resort to such adjustments for the purpose of escaping part of the very heavy burden of taxation. May I point out that the amount of income which would escape tax might, in certain cases, be on the top level of the Super-Tax scale where the accumulated rate of tax would be no less than 19s. 6d. in the £. Therefore, I think it must be clear that, if this plan is to be extended over the whole range of Schedule E, some suitable safeguard should be and must be applied.
As to the form of safeguard, I have gone into that matter as best I could with my advisers, and I think the question of the best safeguard is one which this House would very reasonably wish to debate. I am advised—I hope the hon. Gentleman who interrupted will give his attention to this—that the only safeguard which would be fully effective would be to levy a supplementary assessment on any increase of remuneration in respect of the

current financial year. That supplementary assessment would, if it were done in that way, cover not only special additions arranged for the purpose of avoiding taxation but additions which in fact would have been made in the ordinary course. The difficulty which arises—and on this the Inland Revenue Department have much experience—in applying any such remedy or safeguard is, as the hon. Gentleman the Member for South Croydon (Sir H. Williams) has suggested, that it introduces the element of motive and that is exceedingly difficult from a practical point of view. I am bound, therefore, to say quite frankly to the House, that the advice I have had is that the only really effective safeguard would be one of the kind which I have described.
In the ordinary course it would have been possible to put down the necessary Amendments in connection with this Bill, with the Resolution that would be required, and the whole matter fully debated. I should have no objection to that course, but there are exigencies of Parliamentary time, and there is, I believe, a real danger that the Bill might be lost if we took that course now. I have an alternative suggestion to make. As I explained in the last speech I made on this subject, there will have to be in the next Finance Bill various provisions dealing with the transition from one class of Income Tax payers to another in connection with these Lend-Lease proposals—I apologise for some slight confusion—these pay-as-you-earn proposals, and I propose that I should now give the House an assurance that I will include either in the next Finance Bill or in a special Finance Bill a provision for extending pay, as-you-earn, as the House would obviously desire, to the whole range of Schedule E taxpayers, with the appropriate safeguards, which the House will be in a position to debate. The arrangement I propose will make no practical difference, if the House sees fit to pass the next Finance Bill in which these provisions will be included, to the date at which the benefit of pay-as-you-earn is given to the taxpayers who are not included in the Bill as it stands, with the Amendments on the Paper, because it can perfectly well be arranged that the change in the cases not now covered should take effect from the same date, the beginning of the next Income Tax year. The Inland Revenue authorities would have no difficulty in making their arrangements in


that connection on the footing that the plan is expected to extend over the whole range.
I hope the House will agree that that is not an unreasonable suggestion, that it is a business-like course, that it will enable us to consider at reasonable leisure the extension of the plan throughout the range, and at the same time the safeguards or remedies which have to be applied. For that reason I am proposing that the Bill should now be recommitted for the consideration of the Amendments which were on the Paper in my name on the last occasion. There are one or two things I must add in order to make what I propose perfectly clear. I propose that the Bill to be passed now should extend Lend-Lease—these formula: are very confusing—should extend pay-as-you-earn not only to wage-earners, manual and non-manual, but also to salaried workers up to the £600 limit, and I do not think there is any reason why the special remedies that I am suggesting should apply below the £600 limit. It would be quite impossible to apply any remedy or any safeguard in the case of the wage-earner whose receipts vary from week to week, and I do not think that the risks of collusive evasion below the salary limit of £600 are sufficiently great to require special action. I suppose it would be possible when the Finance Bill comes before the House to include additional safeguards if it were thought necessary, but I do not at present think it will be necessary to deal with more than the new classes that are to be brought in by the extension above £600 a year.
A word as to the position of the Civil Service and certain salaried employees of railways who at present pay-as-they-go on the basis of the previous year's assessment. In those cases there will be no tax discharge, as is, I think, already understood by the House, and therefore I do not propose that the special safeguards that I suggest should extend to those cases. I only say that not because the House is being asked to commit itself now, but in order to make the provisional view I at present hold perfectly clear.

Mr. Glenvil Hall: Would that not also apply to persons who have come into a new employment and were therefore assessed under the

present Regulations actually on the earnings for the year? When persons take over a new employment they are assessed in that year on that year, even though they may pay in arrears next year.

Sir J. Anderson: That is true. They pay twice on the same income. I think I am right in saying that it is not particularly relevant to the points I have been putting, but I think that will be covered by the transitional provisions which will be included in the next Finance Bill. For the reasons I have given I hope the House will be willing to agree to the recommittal of the Bill for the consideration of the Amendments.

Mr. Pethick-Lawrence: My first words—and I imagine this would be the wish of the House as a whole—will be to thank the Chancellor of the Exchequer for listening to the expressed desires of the House and meeting us so substantially. I should like to set out the position as I see it. The original request to the late Chancellor was that manual wage-earners should pay on the principle of pay-as-you-earn. When Sir Kingsley Wood set out to carry that into effect he found it desirable to include in the Bill before us not only the manual wage-earners but certain other people paid on a weekly basis who were in a very similar position. That is how far the matter was carried in the text of this Bill. When he opened the Debate on the Second Reading the present Chancellor was already aware that there was a desire to extend the principle further, and he announced, before there had been any Debate, that he was prepared to extend the principle to all persons under Schedule E in receipt of under £600 a year. The Debates on the Bill showed unmistakably that Members thought that all persons under Schedule E should be included. The Chancellor has examined that proposal and, as I understand him, has accepted the principle completely, with one, not reservation exactly, but what he called safeguard. He is giving an assurance that the whole of the Schedule E taxpayers will be included in pay-as-you-earn. He has not seen fit to introduce that extension by Amendments actually before us, and there may be some people who have not entirely gathered from his statement that by the inclusion of those taxpayers in the next Finance Bill, or in a Finance Bill specially designed for the


purpose, all classes of Schedule E payers will be simultaneously affected by these provisions—that is, those who are affected by this Bill, those who will be affected by the Amendments which are to be incorporated in it, and all who will be brought in by the new proposals which the Chancellor has pledged himself to bring about early next year.
It may be asked why, if the whole thing could have been carried through in next year's Finance Bill, it has been necessary to introduce this Bill. I understand the answer to be that in order to enable the Inland Revenue authorities to get forward with the elaborate tables and other preparations required for implementing the provisions of the Bill so far as weekly wage-earners are concerned, it was desirable to get the approval of the House at this early stage. The extension of the principle to the whole of Schedule E taxpayers can be carried out in a Bill some time in the spring of next year, and they will therefore get the benefits of the proposal precisely at the same time and in the same way as those who are included in the present Bill or in the Amendments the Chancellor will move.
Our thanks are due to the Chancellor for having met the wishes of the House and, as far as I understand, having met them completely. Having said that, I come to the question of safeguards. Let me first say something regarding a matter raised by the Chancellor at the end of his speech. He said that he did not contemplate introducing these safeguards for persons whose incomes under Schedule E were under £600 a year, but he said that it might be possible to alter the Bill when it was introduced so that something with regard to safeguards could be done. I do not think we ought to put too Much on to that remark of the Chancellor's, because I want to point out that the House certainly could not move to bring them in, because that would be a case of the private Member imposing taxation, which of course he cannot do. Therefore, only the Chancellor of the Exchequer or the Government could bring in a proposal with regard to safeguarding. I understand that it is the intention of the Government to confine this matter to persons of over £600. The man under £600 need not be under any misapprehension that, by some action of this

House, the Bill will be extended to bring him into the new proposal.
The Chancellor of the Exchequer does not ask us to pronounce specifically on the particular safeguards that he intends to employ. I understand that they will involve the result that the over £600's do not get the full remission of the intermediate portion of tax, in the event of their salary increasing in the course of the two years, but, generally speaking, the failure to remit will be on a very small scale, unless there is an attempt to evade taxation. I do not think we ought to cavil at the safeguards just announced, and I shall have no hesitation in supporting this Motion.

Sir J. Anderson: A point I ought to have made clear in my speech in relation to the extension to cover Schedule E taxpayers is that it will not extend to members of the Armed Forces, as it would be quite impracticable to make the necessary arrangements.

Mr. Pethick-Lawrence: I accept the Chancellor's explanation, and I amend what I may have said on that subject.

Sir Herbert Williams: I was glad to hear the statement made by the Chancellor of the Exchequer, but I want to make a complaint. The Amendments in the Chancellor's name were not circulated to hon. Members until Friday. Having regard to their nature, they ought to have been available while the House was in session so that hon. Members were in a position to table Amendments and have them printed to-day. I sent Amendments to leave out the reference to £600, but they do not appear. I make the protests that when this procedure is adopted hon. Members should be given ample opportunity to indicate whether they differ from the proposals of His Majesty's Government. The whole thing could have been done to-day, and I am not in the least impressed with the difficulties. The Department have had a fortnight's notice. I regard this as face-saving by people who made a mistake and have not been willing to own up.
In regard to embodying these matters in the next Finance Bill, that will not be good enough. It will be the ordinary Finance Bill after 5th April, but this scheme is to come into operation on 5th April, and we do not want people in a


position of uncertainty. We ought to have an assurance that the necessary Finance Bill containing the safeguards will be introduced so that it may receive the Royal Assent before 5th April. I hope it will have its Title so drawn that we shall be able to amend the provisions of the Bill we are now considering. I hope we shall have satisfactory assurances. If the Government had not been so stiff-necked a week ago, we should have been able to pass the thing properly, but they were obstinate. The sooner the Chancellor realises that he will be more successful as Chancellor of the Exchequer if he is less obstinate, the better. One of the reasons why the late Chancellor was successful was that he had a quick nose for public opinion. It is a great danger to have Ministers who have not been trained on the hustings, and we have too many of them decorating the Government Front Bench.

Mr. Summers: I have no desire to echo the lecture to which we have just listened, but I want to echo the words of the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) in expressing appreciation of the way in which the Chancellor of the Exchequer has bowed to the wishes of the House. If we are to avoid imposing unreasonable safeguards on innocent people in our desire to impose them on assumed guilty people, we need time to consider the safeguards which the right hon. Gentleman has in mind. I hope that we shall endeavour to avoid people deriving benefit from the extension which they would not be entitled to receive, particularly those accustomed to receive annual increments. There will be great difficulties in dealing with the variety of Schedule E payers. Some are to be given seven months, while others, such as temporary civil servants, are to be deprived of the chance to even up by getting a tax holiday. I hope there will be an opportunity later to deal with transitional cases over £600 a year as well as under £600 a year. We are told that all Schedule E payers are to start from the same date, and naturally we rely upon the assurance given by the Chancellor of the Exchequer. I am sure that the approach of the Chancellor of the Exchequer to this matter will give widespread satisfaction.

Mr. William Brown: I join with those who have praised the Chan-

cellor of the Exchequer, but I would ask him to deal with the anomalous position of State servants. I understand that he is not proposing to touch that issue. If we acquiesce in the Motion, we shall be deprived in Committee of an opportunity of discussing the matter. I shall be glad of guidance if I am wrong, but as I understand the position this Motion, if carried, means that the only Amendments we can discuss in Committee will be those that the Chancellor has put on the Paper, and none of those Amendments have the effect, which I and other Members desire, of giving a particular kind of treatment to State servants. Therefore we are put in this position: We could not put down Amendments ourselves to-day because until five minutes ago we did not know whether the Chancellor would meet the point or not. If he had met it, any Amendment on the Order Paper would have been superfluous. It is only now that we know he does not intend to agree, and it seems to me that if we pass this Motion, we are deprived of an opportunity of discussing the matter. Would it be in Order for me, Mr. Speaker, at this stage to comment on the merits of the case of Crown servants in the hope that even now, before this Motion goes through, I might induce a change of heart on the part of the Chancellor? If that is not in Order, perhaps you would be good enough, Sir, to advise me at what further stage of our proceedings there will be an opportunity of raising and discussing this issue, which affects nearly 750,000 people.

Mr. Speaker: I think the hon. Member starts on a false assumption. He assumes that nothing can be discussed but the Amendments which are down in the name of the Chancellor of the Exchequer. Surely it is open to the hon. Member to move a manuscript Amendment on the Motion for recommittal.

Mr. Brown: Would it be in Order to move to add to the wording of the Chancellor of the Exchequer's Motion which appears on the Order Paper:
and to consider also the position of Crown servants under the Bill as it stands"?

Mr. Speaker: That would not be an actual Amendment to the Bill. I could not accept an Amendment of that kind.

Mr. Brown: Would it be in Order to move to add to the wording of the Chancellor's Motion:


and such other Amendments as Members of this House in the exercise of their sovereign discretion may suggest"?

Mr. Speaker: The hon. Member has, I confess, rather puzzled me. The normal way in which to move an Amendment is like that on the Order Paper:
and in respect of the Amendments standing in the name of Mr. Douglas.
I should have thought in an Amendment by the hon. Member stating:
and in respect of the Amendment standing in the name of Mr. W. Brown
would possibly be accepted.

Mr. Douglas: Would it be in Order for the hon. Member to move to amend the Chancellor of the Exchequer's Motion by leaving out all the words after "House" in the first line?

Mr. Speaker: Hardly. That would really mean going back into the whole Committee stage again. I do not think I could accept an Amendment of that kind.

Mr. W. Brown: Should I be right in assuming that I would have an opportunity on the Motion that Clause 3 should stand part or on the formal putting of the Motion for Third Reading on the Report stage?

Mr. Speaker: Whether the subject which the hon. Member wishes to raise will be in Order on the Clause is really not for me to say. As to whether it would be in Order on the Third Reading, I would say not, as it is not in the Bill. The hon. Member could move an Amendment to the Clause on the Report stage, and in this way he might have an opportunity of raising the subject he wishes to raise on the Report stage.

Mr. Hely-Hutchinson: I only wish to support what the right hon. Gentleman opposite said in thanking the Chancellor for acceding to our request and in recognising the great difficulties which make these safeguards necessary. In the Bill as it now stands, and as it is proposed to be amended, and also as it is proposed that it should be extended, there will inevitably be a great many differences in treatment. Some people will get off a great deal more tax than others. I do feel that the only way in which we can hope to get this great reform through is for each one to consider whether his own

circumstances are to be tolerable under the provisions of the Bill and not whether or not someone is to get off more tax than himself. The second thing I wish to say is that while I do not fully agree with the tone of the observations of my hon. Friend the Member for South Croydon (Sir H. Williams), I did think that in his speech there was something of importance and substance. He urged that we should be able to debate the provisions of this Bill at some time before the close of this financial year. It is most important that we should do so, for since the Chancellor has now taken the plunge of agreeing in principle to extend the provisions of this Bill throughout the whole of Schedule E, I believe that the door has been opened to a wide range of simplications and modifications of Income Tax procedures, including the very procedure in this Bill. I believe that now we shall be able to take a new view, scrap the cumulative feature and substitute a much more simple system. I am prepared to give the Chancellor this Bill now in case the view I am putting forward now is wrong, but we ought now to have a chance of suggesting to him how to get rid of the very complicated provisions in the Bill itself.

Mr. Lewis: As it was in response to a suggestion I made in the Committee stage that the Chancellor agreed to consider this matter, I wish to take this opportunity of associating myself with what has been said by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) to-day. I agree with him most heartily that the House should be most grateful to the Chancellor for the way he has responded to the arguments put forward by Members on the Committee stage. I think back benchers should be grateful to him. We have before us in the next Session a lot of very complicated legislation, and it is a great encouragement to back benchers to take the trouble of trying to make the best contribution they can to the legislation of this House if they can feel that Ministers will act as the Chancellor has acted, listen to arguments put forward in the House, and try to amend the legislation where these arguments seem to deserve it, and not, as so often has happened in the past, come to the House with a pre-conceived idea and rely on the Whips rather than on argument in the House.

Mr. Hutchinson: As there was on the Paper an Amendment in my name and in the names of some hon. Friends which had for its purpose the extension of this system to certain classes of salary earners, I desire to say that the assurance which has been given by my right hon. Friend the Chancellor meets the purpose which that Amendment had in view and which proved to be in accordance with the wishes of this House. There were two conditions which I think were essential if the wishes of this House were to be fully met. The first was that this system of pay-as-you-earn should be extended to all classes of Schedule E Income Tax payers without reference to the amount of their individual income. The second essential condition was that all classes of Schedule E Income Tax payers should be brought within this system at the same time. As I understand the assurance given by my right hon. Friend today, both these conditions will be met. Therefore it seems to me that the House ought not to quibble about the manner in which the Chancellor proposes to bring about that result. It is perhaps true, as the hon. Member for South Croydon (Sir H. Williams) said, that the Chancellor might have surmounted all these obstacles by a single impetuous bound. But that is not the way my right hon. Friend likes to act. He prefers to proceed more cautiously, step by step. Those of us who pressed this matter on him at the beginning ought not to be too critical of the way in which he proposes to meet our wishes. He has a great administrative responsibility in a matter of this nature, and certainly I myself, and I think those hon. Members who were associated with me in putting down the Amendment to the Bill in its original form, would not desire to criticise the way by which the result which he desired is to be brought about.
My hon. Friend the Member for Northampton (Mr. Summers) referred to that class of Schedule E taxpayer whose remuneration normally advances by periodical increments. I understood from what my right hon. Friend said that it would not be possible to separate that class of Income Tax payer from the class of Income Tax payer who could so adjust his remuneration from other sources as to bring it within pay-as-you-earn and within the scope of forgiveness of Tax which is an essential part of this system. It is

possible that on further consideration these safeguards which the Chancellor proposes to introduce may be so designed that they will not extend to that perfectly innocent class of person who without any intention to avoid payment of Tax will in fact receive an increment which will not under the safeguard come within pay-as-you-earn. If it is possible to exclude that class of taxpayer from the safeguards which it is now proposed to introduce I hope that the Chancellor will see his way to do so.
I express to my right hon. Friend my thanks for the manner in which he has met us in this matter. I desire to associate myself with everything that has been said by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) and to say further that it will, I am sure, be a matter of satisfaction to all those whose wishes have been made known through the action of the back benchers, to know that the Chancellor has been so willing to listen to their desires and to give effect to them.

The Financial Secretary to the Treasury (Mr. Assheton): I am much obliged to my hon. Friends for what they have said about my right hon. Friend the Chancellor. I will apologise to my hon. Friend the Member for South Croydon (Sir H. Williams) for the fact that the Amendments were not on the Paper earlier. I am sorry that that is so; but, in the circumstances in which we were working, it was difficult. Some of the points raised by my hon. and learned Friend the Member for Ilford (Mr. Hutchinson) and my hon. Friend the Member for Northampton (Mr. Summers) will be more appropriately dealt with on the Bill which is to be introduced subsequently. More than one Member has asked whether a Bill will be introduced before the Finance Bill. If it is necessary to introduce a Bill to implement the undertaking which the Chancellor of the Exchequer has given, such a Bill will, of course, be introduced.

Mr. Hely-Hutchinson: Will it be possible on the introduction of that Bill to Debate again the provisions of this Bill?

Mr. Assheton: I find that question too difficult for me to answer.

Question, "That the words proposed to be left out stand part of the Question," put, and negatived.

Question proposed, "That the proposed words be there added."

Mr. Douglas: I beg to move, in line 5, to add:
and in respect of the Amendments standing in the name of Mr. Douglas.
If the Chancellor of the Exchequer is not going to resist this Amendment, I will not detain the House by arguing it.

Mr. Assheton: We accept it.

Amendment agreed to.

Main Question, as amended, put, and agreed to.

Ordered,
That the Bill be re-committed to a Committee of the whole House in respect of the Amendments, the New Clause (Interpretation) and the New Schedule (Conditions as to Emoluments and Pensions), standing on the Order Paper in the name of Mr. Chancellor of the Exchequer, and in respect of the Amendments standing in the name of Mr. Douglas.

Bill immediately considered in Committee.

[Major MILNER in the Chair.]

Orders of the Day — CLAUSE 1.—(Basis of charge and method of collection of income tax on certain emoluments.)

Amendments made: In page r, line 29, leave out from "subsection," to the end of line 4, page 2, and insert:
(d) any emoluments arising from any employment if the person in receipt thereof satisfies, as respects the year 1943–44, the conditions as to emoluments specified in Part I of the Schedule (Conditions as to Emoluments and Pensions) to this Act;
(e) any pension, if the person in receipt thereof satisfies, as respects the year 1943–44, either the conditions as to emoluments specified in Part I or the conditions as to pensions specified in Part II of that Schedule.

In page 2, line 5, leave out from "being," to the end of line 9, and insert:
pay, pensions or other emoluments payable in respect of service in or with the armed forces of the Crown."—[Sir J. Anderson.]

Clause, as amended, ordered to stand part of the Bill.

Orders of the Day — CLAUSE 2.—(Regulations of Commis- sioners of Inland Revenue.)

Mr. Douglas: I beg to move, in page 3, line 29, to leave out paragraph (b) and to insert:
(b) the amount deducted or repaid at each period of payment of emoluments shall be related to the amount of such payment and to

a proportional part of a provisional adjustment for allowances and reliefs.
This raises the question of the method by which the proposal is to be put into operation. We are all agreed about the principle which is at stake. The House was unanimous in welcoming the Chancellor's announcement of a more comprehensive application of that principle, but there are various methods by which it can be put into operation. The Financial Secretary has quoted Adam Smith's dictum, that every tax ought to be levied at the time and in the manner which is most likely to be convenient for the contributor to pay it. I might also remind him that the same eminent authority said that the time of payment, the manner of payment, and the quantity to be paid ought all to be clear and plain to the contributor and to every other person. I venture to say that it will not be plain to the contributor how much he has to pay under the Chancellor's proposal. It will require elaborate research for the wage-earner to find out how much is to be deducted from his wages. That is highly undesirable. He ought to be able to check his pay packet every week with readiness and without having to go into the elaborate calculations which will be necessary under this system, and which will involve a great many complicated references, which I will not detain the House with now, as I explained them on a previous occasion.
Not only is the amount to be paid not clear and plain, but the manner in which it is to be levied is not in all cases that most convenient to the contributor. There arise under the proposals of the White Paper a large number of instances in which the contributor has to pay a larger contribution in a week in which his wages have actually gone down. That is certainly not the most convenient manner. What is most convenient is that he should make the largest payment when his wages are largest and the smallest payment when his wages are smallest. That result cannot possibly be obtained under the system contemplated in the White Paper. I do not believe it is possible to do what the Financial Secretary said was under contemplation, to adjust the tables so that that would not arise, so long as the tables are constructed on the principle upon which they are now constructed. That


principle is laid down very definitely and clearly in the paragraph which I have moved to leave out. If that paragraph is left out, the Chancellor of the Exchequer will be left in a position in which he can frame his regulations and tax tables without being limited in that fashion, and he will be able to choose between various alternative methods which are available for attaining the results which we all desire. This is one of the very few occasions on which I have found a Minister of the Crown disinclined to help in affording freedom of action in framing proposals which Parliament wishes to see carried out. I cannot understand why the Chancellor is so anxious to have his hands tied in this matter, instead of taking a little latitude in order to apply a simpler system if such a system can be obtained.
Taxes ought to be collected in the manner which is most economical in collection and which does not involve a lot of wasted labour and expense. The system proposed is not going to be as economical as some alternatives which are available. It will mean a large amount of extra work for officials in the Inland Revenue and a still larger amount of extra work for officials an pay clerks in factories. It is a system in which there is a very great liability to error, owing to the complicated nature of the calculations and of the tax tables. Some of those errors may be of a cumulative character, going on accumulating until the end of the period. That arises largely out of the fact that the apparatus devised for carrying on this system is very different from the ordinary methods of accounting and is based on a series of tax cards which are not reconcilable with the books of the business and do not lend themselves to easy and periodical balancing. In this time of war, when the shortage of manpower is most acute, it is deplorable that no effort should be made to try to put into operation a system involving less expense and trouble.
The two points of difficulty in applying pay-as-you-earn are those mentioned in the White Paper of 1942, in which the Treasury told us that it was impossible to do it. One point of difficulty arises where the taxpayer's wages vary about the point where he is subject to or exempt from taxation. So far as that case is concerned, the difficulty can be com-

pletely overcome by a system of weekly adjustments which requires the use of only one single table, which can be put on one single piece of paper. I have given details of that to the Chancellor of the Exchequer. There could therefore be no excuse whatever, if that were the only difficulty to be overcome, for using the elaborate and complicated machinery which is contemplated. The other point of difficulty which can apply with variable weekly wages arises at the point where the wage varies around being subject to the standard rate of Income Tax—at present 10s.—and the reduced rate—at present 6s. 6d. There the difficulty arises because in effect the transition from the reduced rate to the standard rate effects a graduation in the rate of taxation, and, regarded as taxation on the whole income, the rate of taxation gradually rises from 6s. 6d. to 10s., but is spread over a very considerable range of income before the maximum can be obtained. For instance, an increase of £1 a week in the pay above the point at which the 10s. rate begins to operate, raises the effective rate from 6s. 6d. to 7s. 3d. A further increase of £1 over that point raises the effective rate to 7s. 9d. The result is that there is a graduation in the rate of taxation, and the difficulty is not so acute as it might at first sight seem to be. It may be possible that under the simplified scheme which has been devised some slight over-deductions will have to be adjusted sooner or later. I was told when we had this matter under discussion before that it was essential that we should adhere to the cumulative principle. Those words seem to have an element of magic in them like abra cadabra but accumulation, after all, is merely a device for ensuring that over certain periods of time the amount of tax the taxpayer has to pay is adjusted on the assumption that his wage for the whole of the year would be at the average rate for that period. It is not essential that that adjustment should in every case be carried out every week if the adjustment is of a small order.
The point which has to be arrived at ultimately is to see that the tax for the whole year is collected during the year and that it is collected to the precise amount of tax which will be payable upon the total earnings for the year, after deduction of the appropriate reliefs and allowances. That can be achieved in other


ways than that which is outlined in the White Paper. It can be achieved by a system which involves a very much smaller apparatus than the Chancellor proposes and which will involve about half as much labour. The Attorney-General said to us before that the scheme had been enthusiastically welcomed. It has been as far as the general principle of pay-as-you-earn is concerned, but the details of the operation of it have not been enthusiastically welcomed, and the more people who are concerned with the practical application of it go into those details, the more alarmed they are at the work which is entailed and the possibility of error and mistake which arises out of its operation. In municipal authorities, where the task of wage calculation as a general rule is less than it is in industry, because not so many of their employees have fluctuating wages, the prospect involved in this is causing serious alarm, and with employers generally it is causing still more serious alarm. I beg the Chancellor not to commit himself at this moment to one scheme or another but to give himself a free hand within what time remains to him to accept a scheme which is simpler, more economical and more easy to work than that which is contained in the White Paper, and that is the purpose for which I have moved my Amendment.

Mr. Spearman: I should like to support the appeal to the Chancellor of the Exchequer which has been made by the hon. Member for North Battersea (Mr. Douglas) when he appealed to him not to tie his hands so that he could not bring about any improvements in the procedure recommended. But I do not follow up my agreement with the hon. Member when, if I understand him aright, he opposed the cumulative tax principle.

Mr. Douglas: I did not oppose it. I said that it could be applied in various ways.

Mr. Spearman: I think that the cumulative principle is essential to the working of this plan. It is essential that the allowances should relate to the position of the year as a whole and not to that of any particular week, but what I do not agree with are the cumulative Tax tables in the White Paper. I am not at all con-

vinced that the arithmetic of the White Paper is really the best that can possibly be devised. The test by which the procedure in the White Paper will be judged is the degree of accuracy that can be obtained by it and the ease of manipulation. I do not think that it is possible to evolve any plan which will be completely accurate in every conceivable case. I can think of freak cases in which the procedure laid down in the White Paper will lead to very serious difficulties. The actual figures given in the White Paper show a considerable error—as much as 15s. a week in some cases. The Financial Secretary to the Treasury has already promised that there will be some recasting of these tables in the hope of reducing this error, but in that case it will presumably mean an immense extension of these already voluminous tables.
As regards the other test—the ease of manipulation—the procedure in the White Paper does not come out very well. It requires 50 tables for each one of the 50 codes. Anybody who has had experience of calculations knows that it is only a very exceptional clerk who can be sure of not making mistakes when he has to consult tables of this length. What disturbs employers very much is the fact that all of this work which otherwise would be done during the week will always have to be done in the rush period. It will probably mean not only extra clerks to work it out but clerks to check it, and, as the hon. Member for North Battersea has already said, it will mean a big waste of man-power and also an enormous consumption of paper. I do not suggest for a moment that the procedure proposed in the White Paper is impracticable. If that is the only way in which we can get the pay-as-you-earn scheme, the difficulties to which I have referred are a small price to pay for the huge advantages.
Those who, like myself, are most anxious for this pay-as-you-earn plan are perhaps most anxious that it should go through with the minimum of friction and risk of serious hitch. For that reason, I would ask the Chancellor whether he is sure that the plan put forward is really the best conceivable plan. I would refer him to the plan put forward by two actuaries, Messrs. Kirton and Haynes, in a letter to "The Times" on 9th October, which has already been referred to by the Financial Secretary to the Treasury and which was the subject of favourable


comment in the leading article of the City column of "The Times" which was devoted to it on 18th October and which was also referred to at considerable length in "The Times" of yesterday. The authors of this plan claim that the results which are only approximately achieved by the White Paper can be obtained much more directly by two simple tables. The result of it would be that, instead of 1,000 tables or more, about 100 would be required, and instead of the clerk having to make two calculations for each employee each week he would only have to make one—two very important improvements.
Since this plan was put forward there has been a further amendment to it put forward by two actuaries in the "The Times" of yesterday which further cuts down the work involved. As I understand it, the plan referred to in "The Times" of yesterday will mean the same number of calculations as the White Paper, but it reduces the number of tables required from over 1,000 to two. The plan proposed by Mr. Kirton and Mr. Haynes means one calculation instead of two in the White Paper and a reduction in tables from 1,000 to 50. I am not competent to judge between these two, but I suggest that they are well worth consideration. I will not weary the Committee with a technical explanation of this plan but I would support my contention by saying they are put forward by two very eminent actuaries—the general manager, and actuary of one of our large insurance companies, of which, Major Milner, a former Chairman was your predecessor, as Sir Dennis Herbert.
Before venturing to put these plans before the Committee to-day, I consulted employers of labour in my constituency, and I also consulted the chief accountant of one of the largest employers in the whole country, a firm employing about 25,000 men. The chief actuary in question has explored these plans with the greatest care, because he has been very exercised indeed as to the strain that is to be put upon his staff in the event of the proposals in the White Paper being adopted. He tells me that, after careful consideration, he considers that the advantages of the plan proposed by the actuaries greatly exceeds any defects that he can find. My plea to the Chancellor to look at the matter again is in no way an attack on the Inland Revenue. They

deserve great credit for having found a solution to what was said to be impracticable last year by no less an authority than the White Paper of April, 1942. I have always found that the Inland Revenue are most scrupulously fair in the administration of their very difficult task, but they are sometimes inclined to be too ambitious in their plans. They want to produce something which will cover every conceivable case in theory, which means in practice that they give complete satisfaction to none. Among many millions of people who now fill in taxation forms I do not think there is any very great conviction that these forms are really as simple as they can possibly be. I suggest that the Chancellor may be faced with the choice of two different plans which, roughly speaking, will be like this. One will give complete accuracy in the vast majority of cases and far less trouble to work out, but in certain rare cases extra work will be involved. He will have to choose between that and another plan which will cover a larger variety of cases, though not all, with much less accuracy, and much more work will be involved. I hope that the Chancellor will give us some assurance that he will have these suggestions considered very objectively and impartially.

Major Woolley: I would like to join with other hon. Members in expressing my appreciation to the Chancellor for what he has announced today. I am sure it will be carefully examined between now and the time of the next Budget. I think it is evident from the various speeches which have been made that there is a considerable amount of misgiving as to the degree of complication of the additional burdens which the Treasury plan will involve. Anomalies have been pointed out in the two previous Debates, and, indeed, the Chancellor himself appreciated these anomalies so much that he promised to have his tables recast. We have not had any details up to now, and we do not expect them yet, as to what the newly cast tables will look like, but I think it is obvious that if he is to reduce these anomalies of a higher tax for a lower wage he can only do it by introducing a further complication. That is by increasing the size of the already voluminous calculator. We know that that will ask employers and their pay


clerks for even more work than was originally envisaged in the present scheme. Mention has been made by several Members of the complications to the wage-earner as envisaged by the Treasury. If we can possibly introduce a simple scheme, one which is capable of being understood by the average man and woman, it will be very desirable that we should do so, because it is evident in the minds of those who have given this matter close attention that that simplicity is capable of being achieved. Therefore, I hope the Chancellor will not definitely close his mind to the method by which the tax is calculated.
It has been said that the employer will have additional work. That is obvious, and I suggest that the additional labour the Treasury scheme will involve is not there and that the employer will have put upon him a burden that he cannot possibly bear. I would like to refer to one point in the Treasury method of calculation, and that is the reconcilation figure at the end of the year. The Treasury suggests that this figure should be used to re-code the wage-earner for the following year. Let us assume, for example, that there is a reconciliation figure of 2S. 9d., either over paid or under paid—it does not matter which. That amount of balance of tax will be converted into wages, and by that conversion the wage-earner will get into a new code if he has jumped sufficiently to enable him to do so. The figure of 2s. 9d. represents something like 9s. wages. The difference between one code and another is no less than £5, and we can see that by this method of using the reconciliation figure to re-code a man something like ten years may elapse before he is re-coded. Even if the Treasury made up their minds on their own type of pay-as-you-earn scheme I suggest that it would be a great advantage if, at the end of the year, they could have a cash settlement of the reconcilation figure. I would like to ask the Treasury how they intend dealing with those taxpayers who have responded to the request of the Chancellor and have paid their tax in advance. I am quite certain that it is not the intention of the Chancellor to do anything other than give them the same benefit as other people, but there is some misgiving at the moment, and I should be most grateful if the point can be cleared up before the Debate ends.

Sir Joseph Lamb: I would like to support the Amendment and in doing so to repeat that this is a question which deals solely with administration. It does not affect the principles of the Bill, which have been generally approved. I would also like to say how much the act of the Chancellor in recommitting the Bill has been appreciated. This question does not only affect large industries; it affects the very large number of people who are employed by local authorities. The scheme put forward is one which has been carefully considered by the actuaries and financial experts of the local authorities, and I am asked on their behalf to support it in the hope that it will be accepted by the Chancellor. Procedure under the Bill is very complicated. I am not in a position to say how many tables there should be. Others have mentioned large numbers, and we should like to cut them down considerably. But the fact that the House and the country will appreciate is that whatever the procedure is it should be as simple and as clear as possible, providing it gives us the results we require. The problem of staffing to-day is very great. In industry generally staffs have been cut down until it is almost impossible to carry on, and the same thing applies to local authorities. We know what a demand there was for man-power for war purposes. Local authorities were told to train women, and now many of them have had to go. It is almost impossible for them to carry on with their present staffs, because it is not only a question of numbers but—without being unkind to those who have generously come forward—of quality as well. Individuals may be admirable, but the effectiveness of their work is nothing like the effectiveness possessed by those who have been trained in the past and who have had to leave.
This is, too, not only a war-time question. It is equally important in peacetime that administration should be as clear and as concise as possible. It is our duty to find employment, but I do not think anybody would say that it is our duty to find employment which is unnecessary. One of the axioms that is generally accepted is that not only must justice be done, but it must appear to be done. When you get wage sheets which contain a vast number of complicated calculations, it leaves doubt in the mind of the ordinary individual, and where there is doubt there is always difficulty and the


feeling that he is not being fairly dealt with, As I understand this scheme, there should be one table upon which it shall be decided what deduction shall be made with regard to non-taxable income. When that is done, it would be as well to leave calculations to be made at the three, six, nine and twelve monthly periods. Those calculations would be for the return of money and not for an extra demand—which I think is a considerable asset. If another demand is made, it goes down very badly indeed, but if by some recalculation and re-assessment there is something to go to the individual, there is not much complaint. As I have said, the local authorities support this Amendment whole-heartedly, and I hope the Chancellor will give it his full consideration.

Mr. Hely-Hutchinson: I would like to support the closing observations of the hon. Member for North Battersea (Mr. Douglas) when he made an appeal to the Chancellor not to close his mind to the possibility of simplification of procedure under the Bill as it now stands. I think that the cumulative principle of deduction offends against another principle which is true, although it is old fashioned, namely, the principle that the best is the enemy of the good. I think there has been too great an attempt in the Bill to be accurate. I go further than many speakers in suggesting that even greater simplification than in the plan proposed by two eminent actuaries in the "The Times" and the "Daily Telegraph" can be achieved. I think it is possible to achieve it in the light of the entirely new circumstances which have been brought about by the acceptance in principle of the extension of the pay-as-you-earn system to the whole range of Schedule E tax payers. Now the plunge has been taken it becomes increasingly clear—although there will be great reluctance to accept this view—that Income Tax has become and must become more and more a people's tax. The old idea that Income Tax collection consists solely of big game hunting after the well-to-do in the wide open spaces is passing away. Big game hunting can go on because the per capita cost of it makes it worth while, but the Inland Revenue must now face an entirely new problem. Instead of big game hunting only it has also to tackle the problem of mass battues of myriad flights of

starlings. I would like to warn the Chancellor that instead of killing all his birds cleanly and neatly, be will probably have to load with No. 9 shot and fire into the brown.
Once we accept the idea that in collection in the mass from small Income Taxpayers Income Tax becomes a people's tax, then deductions to be made under the tax fall into exactly the same category as what are known as the Beveridge deductions. I think the Minister will have to take a leaf from the book of Beveridge and impose bold deductions without prior assessment. There is a way in which these deductions can be estimated in advance with a far greater hope of approach to accuracy. If my right hon. Friend will consider an entirely new principle, namely, cutting all allowances except the personal exemptions out of the system of tax collecting—for instance, the marriage allowance and the children's allowance—he will then find that he can scrap the cumulative system and substitute a system of standard deductions from various rates of pay which would approximate very nearly to the ultimate result which will be achieved when each tax payer is able after the close of the year, to sit down with the tax-gatherer and reach a final determination of his exact liability to tax. Deduction could be evidenced by a system of stamps and the whole of this complication would disappear. I hope that my right hon. Friend will, in the two or three months that remain, give consideration to this possibility. Now is the time, in wartime, when it is necessary to save trouble and labour; and if he does as I have suggested, I believe he would start something which would make the whole system of Income Tax collecting more flexible in the future.

The Attorney-General (Sir Donald Somervell): My hon. Friend the Member for North Battersea (Mr. Douglas) moved his Amendment in a form which was calculated to be attractive to a Minister. He said, "Why do you not take more power?" This is not one of those occasions on which the House says to a Minister, "You are taking dictatorial powers." My hon. Friend was seeking to press the Chancellor of the Exchequer to take greater powers than he has already. Of course, there are occasions when a Minister or a Government may not want vague and undefined powers.


They may want to be confined within principles approved by the House of Commons, so that if persons come forward with suggestions, they can say, "This is what the House of Commons approved, and I have no executive power to alter it." I appreciate, and my right hon. Friend the Chancellor who has given a great deal of attention to these schemes, and my hon. Friend the Financial Secretary, who has discussed individual schemes, I think, with some of those who have spoken, also appreciate that the simpler a scheme is the better. But in most public affairs, there is no absolutely perfect solution. There is no solution to which no objection can be taken. You can produce objections to everything in this life, and the question is "Which proposal, on balance, is open to the fewest objections?" I must call the Committee's attention to what the Amendment proposes to do. As the Bill is at present, I should have thought that these words were really the core of the proposal and the thing which, contrary to what has been suggested, got this Bill and the scheme in it, accepted as a practicable and fair scheme. The words are these:
The said tax tables shall be constructed with a view to securing that, so far as possible—
Let me pause there. It is not absolute. You cannot get any scheme which does not leave something over at the end of the year one way or the other, and these words "so far as possible" give a certain latitude within which you can move, and within which you may be able to simplify. I resume the quotation:
the tax deductible… on the occasion of any payment.
shall, if I put the rest of it in my own words, meet the tax bill up to that date. That is the idea and the principle—that when every payment comes along, whether at the beginning, at the middle or the end, you will say, "What has this man had so far this year?" and the answer will be, say, "£420," then you will ask, "What tax has he paid?" and the answer will be "So much," and then you will ask, "If he keeps up that average what will he get for the whole year?" and the answer will be, say, "£500." A reference to the code number will show that that means so much tax, and it will then be possible to see how

his tax can be squared up in respect of what he has earned in that year. That is the scheme, and the tables are to carry out that scheme. My right hon. Friend's view is that that is the scheme for which he desires the approval of Parliament. It is based on what we call the cumulative principle, and it has been discussed and considered. Of course it involves complexities, and other schemes which are not cumulative and which leave things to be adjusted at quarterly intervals or at the end of the year can be made simpler; but that is the scheme which led my right hon. Friend to introduce this Bill, and he believes, without in any wise minimising the work which will be put on employers and the extent of the burden of the co-operation which he is asking from them, that this scheme on cumulative lines, is that basis or proposal.

Mr. Spearman: May I ask whether the right hon. and learned Gentleman's reply means that the Chancellor will definitely not consider any improvement in the procedure even though that improvement does not affect the cumulative tax principle.

The Attorney-General: No. I do not think my hon. Friend has followed what I said. I quoted the words of the Bill—though I shortened and rather popularised the effect of part of it—and those are the words which my hon. Friend the Member for North Battersea wants to take out of the Bill. I have pointed out that those are words which the Chancellor regards as the heart and kernel of the principle of his scheme, the principle for which he wants the authority and approval of the House of Commons. He is prepared to welcome any suggestions and criticisms of the actual tables in the White Paper when they are under consideration. My hon. Friend the Member for Scarborough (Mr. Spearman) supported the cumulative tax principle and said that if the principle in this Sub-section were the only principle, he did not suggest that the White Paper was impracticable. Of course it is a matter of opinion whether or not this is the only principle in the sense that anybody can think of other principles, but my right hon. Friend and the Government believe that this is the right principle and that, complicated as the matter is, it is essential that pay-as-you-go should be started on the cumulative principle.
All other schemes involve to a greater extent drawbacks and difficulties, either over-deductions or under-deductions. My hon. Friend the Member for Stone (Sir J. Lamb) said, and I rather agree with him, that, on the whole, people prefer over-deduction to under-deduction but of course it depends on the point of time to which you are directing your mind. It may be extremely inconvenient to have an over-deduction just at the time when the over-deduction is made. It might be just when you wanted the money for some other purpose. I quite agree, that when a demand comes in later on, in respect of an under-deduction there is acute pain. The pain which arises from an over-deduction is spread out more and the man concerned may not be conscious of it at all at the time. My right hon. Friend the Chancellor has heard the large part of this Debate and I wish to say on his behalf that he regards this Subsection as embodying the principle on which the Bill is based and must continue to be based. Within the principle laid down in that Subsection he will be glad of any help from hon. Members, or from accountants, in seeing that the tables by which the principle is carried out, are accurate and as simple within the reasonable limits of accuracy as is possible, But he cannot advise the Committee to accept the Amendment.

Sir J. Lamb: Would my right hon. and learned Friend say something about the possibility of getting more staff?

The Attorney-General: The question of shortage of staff is one which arises in many other connections and I dealt with it on the last occasion. I said then that my right hon. Friend had been in communication with the Ministry of Labour and National Service and that they desired to review their instructions to the district man-power board to ensure that special consideration would be given to any additional work which might be thrown on wages clerks as a result of these proposals. But I do not minimise the difficulty.

Sir J. Lamb: I have had a case brought to my notice in which a person who was employed by a local authority and who gave great satisfaction, being a very good calculator, was taken away by the Ministry from the local authority to work for an auctioneer.

Major Woolley: May I ask the right hon. and learned Gentleman how he intends dealing with the reconciliation figure at the end of the year?

The Attorney-General: That does not seem to be a point about which one would, as it were, take up arms. I gather that under the scheme as it is at present it is carried forward and that seems to have a certain advantage in that you do not have to ask the man to produce 2s. 9d. or some such sum, or pay him 2s. 9d. as the case may be. I have no doubt that is something which the Revenue authorities would be prepared to discuss with employers and with my hon. Friends and others interested, and it does not seem to raise a great point of principle.

Mr. Benson: I had not intended to speak in this Debate because I felt sure that we should get a really convincing reply from the Attorney-General to all the points which were raised, but I do not think the right hon. and learned Gentleman has been as convincing as he usually is. He took his stand on principle, which is always a dangerous thing for a lawyer to do. I do not think that the Committee which has welcomed the general basis and general object of the Bill is really very concerned with the cumulative principle. I do not think the Committee are particularly concerned with meticulous accuracy of deduction and in any case the wage-earner is not concerned with it. The objection to assessment on the previous year's earnings was that there are very large variations in wages between one year and another. Much of that was put right by the modification introduced in last year's Finance Bill. The overwhelming argument in favour of pay-as-you-earn is the fact that sooner or later there will be a very large number of people who are now in industry going out of industry. In the post-war period of industrial adjustment there would be vast masses of tax which we could not collect and it would be impossible for the Board of Inland Revenue to decide who should be forgiven tax and who should not. It is problems of that kind rather than the question of meticulous accuracy or of some unimpugnable principle that we should be concerned with. We have to weigh whether a certain amount of accuracy is worth a certain amount of


complexity, and I think simplicity and ease of understanding are worth a good deal of accuracy.

Mr. Hely-Hutchinson: Since the learned Attorney-General has spoken one has become aware of the real reason why the Chancellor is wedded to what is called the cumulative principle. I think he or his advisers are unable to get out of their minds, during the period of deduction, the conception that this is a yearly tax on yearly income, and if he allows that thought continually to block his mind all through the year he is going to have a complicated system of deductions. I suggest to the right hon. Gentleman a let-out; he can still maintain the cumulative system provided he will not accumulate until the end of the year. I should also like to say that when I referred earlier to the suggestion that all allowances should be taken out of the tax collection system I did not mean to suggest that allowances should be abolished but that marriage allowances, children's allowances and similar allowances should be distributed by a machinery separate from that of Income Tax collection, so as to simplify the problem of Income Tax collection itself.

Mr. Douglas: I find the reply of the Attorney-General singularly unconvincing. My Amendment did not ask for vague and indefinite powers to be placed in the hands of the Chancellor, because there would still have remained in this Sub-section the direction that the total of tax payable in respect of any emoluments for any year of assessment should be deducted from the emoluments paid during that year. That cardinal principle, which is the real essence of pay-as-you-earn, would have remained, and my Amendment would merely leave a certain degree of elasticity in carrying out that principle. Nor do I agree with the Attorney-General that the cumulative tax system as defined in the White Paper is essential to the principle of pay-as-you-earn, because it is not. That principle can be carried out in various ways. The real origin of this proposal is to be found in the numerous cases in which workmen were assessed upon the wages of the previous year, which were much higher than the wages they were drawing during the year in which they had to pay the tax. Consequently, they were paying a tax com-

puted upon higher earnings out of lower earnings. In theory the man ought to have saved the money when he was earning it, but in practice nobody can expect that to be done, human nature being what it is, and so pay-as-you-earn was proposed to overcome that difficulty and to ensure as nearly as maybe that the tax was paid out of the earnings which had attracted the tax.
It is not essential in order to carry out that principle with tolerable justice to adopt the plan of recomputing the tax every week upon the total of the earnings up to the end of that week, and even, if you do that it is not true that by that means you avoid over-deductions, because whether there are over-deductions or not depends not only upon the facts up to that period of the year but upon things that will happen in the subsequent period of the year, because it is the accumulation of those things which determines whether there has at any point been what is called over-deduction or under-deduction. It would be easy to construct examples in which the scheme in the White Paper would result in very serious over-deductions. Example B in the White Paper is clearly one in which there are serious over-deductions. It will be seen that during weeks 29 to 36, a period of eight weeks, there are refunds to the taxpayer amounting to £5 19s., which means in effect that there has been over-deduction. One could construct more extreme cases. The White Paper of 1942, which was directed to showing that this thing could not be done at all, contains an example in paragraph 32. If that example were reversed, so that the higher wages were in the first weeks of the year and the lower, or nil, wages in the last weeks, the result of applying the present proposals would be over-deductions of a startling amount—£6 5s. in the first six weeks, £12 5s. in the first 16 weeks, and even after 26 weeks there would be over-deductions amounting to £12 7s. Therefore, I entirely deny that the White Paper scheme prevents over-deductions. It merely produces a provisional adjustment at the end of each week which may be undone at the end of the following week.
The plan which I offered in all seriousness to the Chancellor of the Exchequer obtains a provisional adjustment as quickly as may be necessary. It gives


an adjustment every week, which is obtained by the use of one single table upon one sheet of paper, which the pay clerk can keep in front of him and read from without having to turn over as many pages as there are in the telephone directory, as under this scheme, with all the liability to read off the wrong figures owing to the complicated way in which the tables are constructed. With the single table the pay clerk can ensure provisional adjustment every week, and in the case where wages fluctuate between the no tax point and the reduced rate of tax can produce a cumulative adjustment every week just as accurately as does the scheme of the Chancellor of the Exchequer. Where the wages fluctuate very widely there may be a slight over - deduction but that would occur only where the wages are relatively high and such over-deduction would not be a serious detriment to anybody. The refund could be made at the end of the quarter, or, if preferred, at the end of four weeks, and even if done at the end of four weeks it would not involve half the labour of the scheme the Chancellor has proposed. In any case we should be dealing with a range of wages where the slight over-deduction was no hardship, because even if the man had no reliefs at all he would have to have £3 10s. 5d. before any need of adjustment at all arose, except for fractional errors owing to the construction of the tables. In the case of a man entitled to reliefs of £80 the amount before any adjustment became necessary would be £5 4s. 7d.; and so on for higher reliefs.
I say once more to the Chancellor that he is asking employers, at a time when labour is scarce, to do something which it will be extremely difficult for them to do, because—I want this point to be noted—this work has to be done within a very short time, within a day or possibly within a few hours, or otherwise the principle of deducting the tax in the week in which the money was earned disappears. In works where there is piece work and overtime it takes days, in some cases, to calculate wages. The payment of wages has been accelerated in response to requests by the Government that pay days should not come at the end of the week, and the amount of additional work which will have to be crowded into a short space of time will upset the balance of things.

Further, I would remind the Committee that if Parliament at any time alters the standard rate of tax, the reduced rate of tax or the point at which the reduced rate of tax operates, every one of these tables will have to be scrapped. They will have become waste paper and all the processes of calculation for producing another set of tables will have to be gone through again. The whole thing is extremely wasteful and uneconomic, and the result could have been achieved just as easily by means of a handful of tables which anybody could have manipulated without any trouble.

Amendment negatived.

Motion made and Question proposed, "That the Clause stand part of the Bill."

Rear-Admiral Beamish: I made an inquiry at some works with which I have contact and where 2,000 men are employed. At a conservative estimate, the cost to the firm will be not less than £10 per week in man-hours and clerks' time, to make the investigations and the arrangements for collecting the revenue and it will cost about £500 a year. Among 95 per cent. of the men employed the whole system is popular. I would like to remind the Chancellor of the Exchequer of this matter, and I cannot do better than read a letter on the subject which was sent to me when I was making the inquiry. It is as follows:
In the works, we pay on Friday for the week ending the preceding Wednesday, that is to say, we have two days in which to do all our calculations. It will be quite out of the question for us to make the tax calculations in time to pay on Friday. Our case is in no way exceptional and either we shall have to get the men to agree to a longer interval between making up and paying, or the Revenue will have to postpone tax collections by one week. The second alternative would create a number of administrative difficulties for the Revenue, but something will have to be done to give the employer more time to calculate deductions.
I am fairly sure that employers of large numbers of men will need a lot of consideration and some assistance in the work that they are to do.

Mr. Rhys Davies: I am surprised at what has been said about employers collecting taxes for the State. One of the first things that the State did to compel employers to collect taxes was to adopt the National Health Insurance system. Employers have been collecting taxes for the State under most of our


schemes of social security, and in shops the employer is now collecting Purchase Tax for the State, so I do not see that the employers need to complain. After all, what is £10 a week for a man who employs 2,000 people?

Rear-Admiral Beamish: It is £500 a year.

Mr. Davies: Let me see how it works out. Suppose the average wage is £4 a week, that is £8,000 per week in wages, while the cost to the employer is only £10. The hon. and gallant Member should not complain at such a paltry sum.

Rear-Admiral Beamish: I am not complaining. I never do complain. I am only saying that there is a case for consideration, no more.

Sir Frank Sanderson: Is not the hon. and gallant Member aware that industry does not resent the extra expenditure which will be incurred?

Mr. Davies: I never thought I should find two Conservative Members of Parliament quarrelling like that. I speak with very slight knowledge of deducting taxes on behalf of the State, but if the employers did not collect this money for the State, they would be taxed more than at present in order to pay the salaries of people employed by the State to do the job. We call upon the employers to collect the tax for the State, and I would not be a bit surprised if the employer who is spending £10 a week is not getting the work of collection done for one-tenth of the charge which the State would incur in paying a civil servant to do the job.

Sir J. Lamb: Will the hon. Gentleman support the release of civil servants to do this job for the employers? The employer does not object to collecting tax. He only says that it is impossible to do it with the staff he has.

Mr. Davies: This division in the Tory Party is interesting. I have seldom come across such an exhibition before. I have always known that on this side of the House there were slight differences of opinion but I never heard such a noise about such a trifle for a long time. [Interruption.] I hope the hon. Member will allow me to make my own speech, as I am a nervous person.

The Deputy-Chairman (Mr. Charles Williams): The hon. Gentleman has been getting far from the subject. There is nothing in this Clause which enables him to discuss whether he is a nervous person or not.

Mr. Davies: I was coming to the Clause itself, the first paragraph of which says:
The Commissioners of Inland Revenue shall make Regulations with respect to…recovery of Income Tax in respect of emoluments.
What is the meaning of the word "emolument"? There is a tendency in this House to assume that the income of the worker is always based upon wages. What about the shops of this country?

The Deputy-Chairman: I am sorry, but we have already had a very long discussion upon emoluments, and to discuss it now would be to go much too wide.

Mr. Davies: I did not intend to do it now, except to ask the hon. and gallant Member a question. When the employer deducts the tax from wages, emoluments or bonus, when will the Treasury be able to send to the employer a statement of how he is to deduct? Will the Treasury consult the employer as to the Regulations to be issued? It is not very easy to understand what the Income Tax collector may tell the employer. Hon. Members may think that wages are all paid once a week, but what about the man who is paid a monthly salary, which goes straight into a banking account? He never sees the money. What method do the Treasury intend to employ for the man who will never know what deductions are made from his salary? When wages are paid weekly, will notice of deduction be sent to the employer to correspond with the date when this method is first introduced? If full wages are to be paid for two, three, five or perhaps 10 weeks and then the arrangement for deduction is to come against one week's wages, a man may go home on that occasion with no wages to give his wife. I am sure that it is not intended by the Treasury, but I would like to know whether the Treasury intend to consult employers of labour before they draft their Regulations. I want them to be good enough to consult all the categories of employers about the different methods employed by those categories in paying wages. Hon. Members may think that


wages are all constant, but that is not so. Where you have piece rates in operation, especially in coalmining and textiles, wages differ in accordance with the tonnage or yardage produced. Will the Regulations take note of the difference in method in arriving at the wages that are paid? I pity the Treasury. How are they to arrive at the tax to be paid in cases where wages are calculated by fractions and decimal points?

The Deputy-Chairman: We have had a fairly long discussion on wages before, and all these points have been put many times. I think the Committee will agree that we cannot carry on discussing matters of this kind over and over again.

Mr. Davies: I am coming to a conclusion and was about to sit down when I was called to Order. All I wish is to put the two points again as definitely and clearly as I can. First, whether the employers who pay wages will be consulted before the Regulations are issued by the Treasury; and, secondly, whether there will be a denial in the deduction of taxation simply because the Treasury may not be ready in time to impose the taxation, through the employers, on the wages.

Mr. Assheton: May I reply quite briefly to the hon. Member? He asked whether the Treasury, and by that I take it he means in this case the Board of Inland Revenue, will consult employers. The answer is that they are consulting the employers on these matters, they have been consulting them for some time, and they will continue to consult employers between now and the time when this new legislation takes effect. The bon. Member may be well assured that we will take into account very fully not only what employers tell us but also the representatives of the various trade unions. On the second point, I can assure him that there will be no question of a lag. The new system of taxation will come into effect during the first week of the new financial year, and I hope therefore that the hon. Member's anxiety will be set at rest.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Orders of the Day — CLAUSE 3.—(Transitional provisions.)

Amendments made:

In page 4, line 27, at the end, insert:
other than emoluments of any class which, in relation to tax for the year 1942–43 was

generally treated for the purposes of the regulations under Section eleven of the Finance (No. 2) Act, 1940, as a class of case where tax was deductible from emoluments otherwise than by virtue of those regulations.

In page 5, leave out lines 29 and 30, and insert:
(6) Where a person enters an employment.

In line 33, leave out from "forty-four," to the end of line 34, and insert:
and the wages and other emoluments arising to him from that employment are by virtue of paragraph (b) of sub-section (2) of Section one of this Act, but would not apart from that paragraph be, emoluments to which this Act applies, those wages and other emoluments shall be left out of account for the purposes of sub-section (3) of this Section."—[Sir J. Anderson.]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. W. Brown: I wish to raise a matter which I think will affect some constituents of every Member in the Committee, and will in all touch the fortunes of some 750,000 people. I refer to servants of the Crown. When this Bill first came to the House, servants of the Crown were excluded from its scope, and it became my duty to urge that Crown servants should be brought within the scope of the Bill. The Chancellor of the Exchequer was good enough to agree to that, and I may say that whatever difficulties I shall shortly refer to, it is in my opinion sound in principle that State servants should be brought within the scheme. But if they are to be brought within the scheme, I think the State servants themselves are entitled to ask that the incidence of the scheme, as it affects them, shall not be more unjust than the treatment given to other categories of taxpayers. I propose to show, I think beyond any possibility of dispute, that the way this thing is to be applied to State servants is fantastically unjust, and that the Committee ought not to let the Bill leave the House without insisting upon very definite assurances that the complaints I shall outline will be dealt with.
I will take two main types of case. The first is the case of the individual who to-day is employed in private enterprise in commerce or industry, and who to-morrow comes into the public service, as a temporary clerk or officer, for the period of the war and perhaps for some time afterwards. In order to make the


calculation easy, let us assume that the day he comes in is 5th April, 1943, or 1944. In outside industry he will have been paying up to this date one year behind, that is to say, he will be paying this year the tax that accrued on his income of last year. As soon as he comes into a Government Department he begins, from the very first months, to pay tax on his current earnings. So that, for the first 12 months in his employment in a Government Department, he is paying tax on two years' income within a single year. First he is paying this year's tax on salary earned last year, and then he is also paying this year's tax. (We have had this system of deduction at source for a long time in the public service.) I submit that this is a monstrous thing. It is wrong, unjust and unfair, and the Committee should not tolerate that a Crown servant should have to pay two years' Income Tax on one year's income. I am not alone in complaining about this. The Chancellor will probably be surprised to know how much discussion there is within his own Department, very vehement discussion, which the tender ears of the Chancellor had perhaps better not hear. This discussion is justified, for the position cannot be defended. I ask the Chancellor to meet that kind of case straight away, in a way I will shortly suggest.
When we first complained that it was monstrous to deduct two years' tax from one year's salary the Chancellor of that day said, "Well, it is pretty rough now, but after all, these temporary civil servants will go out into private enterprise again after the war and then they will have the accumulated reward of virtue, for they will, for a period after going out into the world again, be exempt from tax." That at least was some sort of reply. [Interruption.] That reply was given by the late Sir Kingsley Wood. But that reply cannot apply now, because from now onwards these men will be on the pay-as-you-go system, and when they go into the outside world again there will be no question of a period of exemption from taxation. They will have to go on paying, so that the justification advanced in this case at an earlier stage cannot now apply at all.
I now wish to raise the general question. It has been decided—and I am

not quarreling about this at all—that when the wage-earner comes into this scheme he is given a 10 months' discharge of tax liability, in order to make it possible for him to come into the scheme. The salaried worker is to get a smaller but a substantial, discharge of seven months, in order to facilitate the changeover from one scheme to another in his case. I wish to impress on the Committee that for decades past civil servants have been paying on a pay-as-you-go basis. It is true that they have paid this year on last year's assessment, but they have been paying currently all the way through. In other words, the Chancellor of the Exchequer has been getting his tax from us months before it was due—months before it would have been due if we had been ordinary taxpayers in the outside world. The only justification he has had for that is that we have been to hand. We have been near by, and within his clutches. We have been servants of his, and he could get hold of us in a way that he could not get hold of a member of the outside public. For long years past we have been paying currently on our incomes. In other words, we have been paying months ahead of the outside community. The outside community get their demand notes six months after. If they pay promptly, they are six months behind civil servants. And they do not always pay promptly, as hon. Members know.
At best the civil servant has been six months ahead, and in many cases years ahead, of the outside taxpayer. That ought to have counted to him for merit, but what does the Chancellor say? He says, "Because you have been so good, because you have paid in advance, we shall not give you the seven months' rebate or the 10 months' rebate which we give to the outside world, to whom this scheme is applied for the first time." I submit that is monstrously ungenerous and unfair. Now the Chancellor may very well say that he has collected this money, and that however hard it is for him to forgive contingent moneys in the future, that is nothing to the hardship it would impose on a Chancellor to ask him to pay back money he has already got. I can very well understand that the Chancellor would entertain the strongest objection now to paying out seven or 10 months' acquired tax which he has wrongfully had, year after year, from the civil


servants—wrongfully from the point of view of there being any justice about it. I do not intend to ask him to do that, because our present Chancellor is not merely Chancellor but is Scotch too.
What I urge is that there is a way out which will satisfy our sense of justice on this without at the same time involving him in paying out large sums of money from his acquired store. That way is to give the civil servant a credit—both the temporary who has come in for the period of the war, in respect of that double payment, and the ordinary civil servant in respect of the seven or 10 months' discharge. Give him a credit note which can be used, not now, but in the last year of his service with the State, so that he gets a corresponding rebate even though it is at the very end of his career and not now, as it is in the case of the outside wage-earner. I submit that if the Chancellor did that, it would satisfy our sense of justice on this matter, and it would not involve him in the immediate pouring out of public money. This proposal is such that I am astounded at my own modesty in making it. I understand that the Staff side of the National Whitley Council, which represents the organised civil servants, is sending a declaration either to the Chancellor or to the Financial Secretary in a few days' time.
I do not know whether we need an Amendment of this Measure to make what I have suggested possible. I believe it is possible without an amendment of the Act, because civil servants hold an exceptional position in regard to Income Tax legislation, as they are paid direct by the Crown. I hope that the Chancellor will do this, and that when that deputation comes to see him in a few days' time, he will not give them a stone when they ask for bread, he will not give them merely the soft answer which turns away wrath; but that he will give that just and generous answer which is the mark of all great souls, among whom I include my right hon. Friend.

Mr. Brooke: The hon. Member for Rugby (Mr. W. Brown), in his delightful speech, has brought forward a case which he believes to be very strong. My point is rather different, but my case is even stronger. The hon. Member has been arguing that people who receive the same income in

1943–44 should be liable to the same treatment, even though they are in different kinds of employment. My argument is that we must be absolutely certain that people who have earned the same amounts in 1943–44 in similar kinds of employment receive the same taxation treatment. As it is, this Clause lays down that the taxation of two people in virtually identical circumstances may differ radically, according to the dates of their death. May I give a practical example? Let us take two individuals, whom we will call Bill and Tom. I had thought for a moment, in order to bring it home to the Government, that I would call them John and Ralph, but I will not do that, because my story postulates the early death of both of them.
Both are in similar employment. Their earnings in 1943–44 would make them liable to tax of about £120 for the year. That would be deducted at the rate of about £10 per month in the last two months of the year, February and March, 1944. Bill, however, dies on about 7th April, 1944, and, benefiting from lines 7 to 15 on page 5 of this Bill, his widow or dependant will be free from any further tax liability. The £20 will have been paid, and the remaining £100 will be discharged. Tom is not so fortunate. He dies a week earlier, just at the end of the current Income Tax year, when he has had all his earnings but, unfortunately, has not lived beyond the critical date of 5th April, and so has no advantage to accrue to him from the terms of this Clause. In fact, therefore, while he, too, will have had £20 deducted from his earnings, his widow will be faced with a demand for no less than £100 on account of tax arrears. It seems to me indefensible that two peoples, whose cases are in no way different except for the chance dates of their death, will have to pay in the one case £20 and in the other £120—six times as much—in Income Tax for 1943–44. I am fortified by a phrase which the Chancellor used on an earlier occasion, when he said:
Taxpayers are inclined to look very closely at the treatment meted out to other taxpayers, and a feeling of injustice, which is bad from every point of view, can very easily be engendered if hasty action is taken without carefully considering all the possible implications."—[OFFICIAL REPORT, 20th October, 1943; col. 1450, Vol. 392.]
Of course, I realise that the Chancellor could not hastily at this stage amend this


Bill to correct the anomaly I have mentioned, but I hope I have established to the satisfaction of the Committee that injustice arises here. I hope that the Chancellor will be able to give an assurance that this can be treated as one of the points remaining open for further examination, with all the other transitional points which he has said will have to be settled up in the later Bill which is promised to us.

Sir Herbert Williams: I would like to emphasise the importance, which has been mentioned by my hon. Friend, of clearing up the position of the burden on widows. I would like to mention a case. I do not know the man, but I knew of him; he was employed by a company with which I have some connection. He made rapid progress, and at the time of his death he was receiving a salary of £1,250 per annum. In the last years of his life he had a series of illnesses and expensive operations, and he left only £960, but the widow had to find £380 for Income Tax. This is a more serious matter than Death Duties—the widow was, in fact, owing about 18 months' tax. Although the position has improved, as I understand, by the proviso to which my hon. Friend has referred, I hope that something further will be done, and that the Chancellor will take note of what my hon. Friend has said. I imagine that this Bill, as it contains such a variety of administrative provisions, cannot be certified as a Finance Bill so far as another place is concerned. Mr. Speaker has to decide whether there shall be a certificate, but if there is none some parts of the Bill may be susceptible to alteration in another place, and perhaps my right hon. Friend will bear these points in mind then.
I am much impressed by what was said by my hon. Friend the Member for Rugby (Mr. W. Brown). Perhaps I might quote my own case. In January, 1928, I went to the Board of Trade as Parliamentary Secretary. I had at home one of those interesting documents asking me to make certain payments to the collector of taxes. I had not in fact made the payment by 15th January. Two days later the first official interview which I had, after meeting the head of my Department, was with a gentleman calling himself the assessor

of taxes, who wanted to know all about my private affairs. On 31st January I had a payment made to my bank. From that they deducted my Income Tax, so I was in the unhappy position of being taxed on the employment I had left and on the employment I had entered under His Majesty. The effect of becoming a junior Minister was that my income was reduced anyhow; and, altogether, I had a rather unhappy time in that position. I notice that the present holder of that position is in his place; I do not know how he has got on there. In May, 1929, the Prime Minister of the day decided to resign, and I automatically got the sack with him. I went back to my old job. Before long I had a communication from my previous collector of taxes. He said, "I shall have to raise an assessment on you." I said, "What are you going to assess me?" He said, "You will have to guess what you will earn, and we shall have to make some adjustment later, if necessary." So I never escaped. I paid twice in one year, and did not get out of paying anything in the other. The Chancellor seems somewhat perturbed at that, but he is not nearly so perturbed as I was. I have tried to see some way in which I can help myself over this Bill, but I cannot see any. However, I am not a jealous person, and because I am a Schedule D man I do not feel that those coming under Schedule E ought not to have a measure of justice. I hope, however, that my right hon. Friend will see what he can do to meet the point put by my hon. Friend the Member for Rugby and my hon. Friend the Member for West Lewisham (Mr. Brooke).

Sir J. Anderson: My hon. Friend the Member for Rugby (Mr. W. Brown) made an eloquent plea on behalf of the Civil Service. I would like to begin by assuring him that my general attitude towards the Civil Service is no less sympathetic than his, although I occupy for the moment a position of greater detachment. My hon. Friend put forward his plea under two heads. He dealt first with the case of over-lapping payments. This point was also made by my hon. Friend the Member for South Croydon (Sir H. Williams). It is true that when a person who has been taxed on the basis of the previous year comes into the Civil Service, as a great many public-spirited people have done for purposes connected with


the war, there is for the time an overlapping of payments. There is an obligation to pay the overlap of tax, if it was on Schedule E, for seven months after the beginning of the Income Tax year in respect of the previous occupation or employment, and there is the current obligation to pay tax as a civil servant. I have no doubt that those who have felt a sense of injustice on that score have in many cases been comforted by the assurance that there was a good time coming when they would have, on their reversion from the Civil Service to outside employment, a corresponding tax holiday, We are doing away with that tax holiday so far as Schedule E taxpayers are concerned by introducing pay-as-you-earn. I am perfectly ready to promise between now and the Finance Bill, when we shall be dealing with transitional problems, special consideration of that particular trouble.

Mr. Watkins: Will that cover the case of railway salaried officers as well?

Sir J. Anderson: It should be taken that when I speak of civil servants I include those who by this Bill are treated on the same footing, salaried railway servants, and, may I say, Ministers of the Crown—my hon. Friend will realise the difficult position that puts me in. Let me come to the second proposition that my hon. Friend advanced with such sweet reasonableness. He said, in effect, "Inasmuch as you are giving as part of this plan of pay-as-you-earn, a remission, or a discharge, of tax for seven months or ten months, as the case may be, you ought surely, in equity, in order to avoid an unnecessary sense of grievance, to give a similar discharge to the civil servant." He very kindly suggested a method by which he thought that that process could be made less painful to a Chancellor of the Exchequer. Let us look at this thing on merits. Civil servants have been on the system of pay-as-you-go, if not precisely pay-as-you-earn, from the beginning of time. The hon. Member tried, not perhaps with his usual success, to make a grievance of that, because really pay-as-you-go is what civil servants under his guidance are asking now. They want pay-as-you-go made one better, that is, converted into pay-as-you-earn. When they are asking for that, it is rather difficult for them to make of the fact that they

have been half-way there from the ginning of time a grievance seeking for special remedy.

Mr. W. Brown: I did not make a grievance of that, but that it was not the same for everybody. It is not an absolute grievance.

Sir J. Anderson: The whole of the grievance as I understand it is one of relativity, that other people are being treated better. It is not very easy, as I think he must have felt, to build on that particular feature, seeing the position that civil servants occupy in relation to this business. My predecessor did not propose to include them. I included them as an Amendment to the Bill as drafted. Why? Because, rather to my surprise, the civil servants came along in deputation and said that they wanted it. I did not at first understand that, because in the case of many of them with rising rates of remuneration the effect of this Bill, by substituting the current year for the previous year, may make a lot of civil servants pay more tax. Then I was told that there are all the people who are earning large sums for overtime and that when conditions became normal and overtime ceased, those people would benefit by being on the current year's assessment. Then there were all the people who during the war, because of the expansion of the public services, have been holding acting appointments. Some of them may expect in the ordinary course to revert. They will benefit at that time if they are now brought in. For those reasons the civil servants, through their organisations, asked not only that the scheme be extended to them on the footing originally contemplated, that is, for manual wage-earners and non-manual wage-earners and then civil servants up to £600 a year, but over the whole range of Crown servants without limit of remuneration. It was at their request. It was made clear to them at the time that in their case, as there was no question of overlapping payment, there should be no discharge. That was made clear, and nevertheless they ask to be brought under this scheme.
What are the merits of the proposal that civil servants should be given a discharge? I made it perfectly clear in my speech on the Second Reading that discharge of tax was a feature of this scheme which was not advocated for its own sake.


It was included in the scheme because it was an essential condition of securing the introduction of what was regarded as a superior method of assessing and collecting taxation under Schedule E; its object was to ensure that there should be no overlapping payments. It was in order to get rid of these overlapping payments resulting from the introduction of pay-as-you-earn that discharge of tax was included as a feature of the scheme.
I must hold firmly to the principle that discharge could only be conceded where there is an element of overlapping. If I were to give way to a plea which can be put forward in a way that excites sympathy, that we ought to try and treat all classes alike and inasmuch as the ordinary Schedule E tax payer is getting what in effect is a substantial remission of tax—though in the course of Debate attempts were made to whittle down the effects of that remission, by urging that it amounted to very little—if I were to try to accept this plea I should really put my foot on a very slippery slope. It is not possible to make such changes as we are making now without creating distinctions which will inevitably give rise to a sense of grievance. I said so, and made it clear, when I first told the House I was prepared to consider extending pay-as-you-earn over the whole range, that I knew quite well the concession asked for, if it was made, would become the basis for applications for adjustments of all sorts of supposed hardships, not in themselves substantial hardships, but hardships by comparisons made between one class of taxpayer and another. I have to resist such claims. If not, I should be in a hopeless position in regard to people under Schedule D. There are taxpayers paying on earned income under Schedule D who have just as much claim to remission and adjustment as anybody else, but it cannot be done. Great as my sympathy is for civil servants, but putting on one side altogether any personal feelings, as I must, I find it inevitable that this plea should be rejected.
Now I come to what was said by my hon. Friend the Member for West Lewisham (Mr. Brooke) on a cognate question. My hon. Friend drew attention to the contrast between the treatment under this Bill of the taxpayer who dies just before the end of the tax year and the taxpayer

who dies just after the end of the tax year. I repeat what I have said already with regard to the plea of the hon. Member for Rugby. I must hold firm to the principle that discharge can only be granted where there is an element of overlap. In the case of the person who dies before the beginning of the tax year there is no current assessment in the following tax year. There is, therefore, no element of overlapping. Where a person dies after the beginning of the tax year there is an element of overlapping. I admit frankly that we are not being particularly logical, because we leave the person who dies before the beginning of the tax year to meet the whole of his obligations for the current year. But we do not propose, where a person dies after the beginning of the tax year, that if overlapping ceases because he has died and is no longer earning and liable for tax in the current year, to re-impose upon him the balance of the tax to be discharged for the previous year. That is perhaps, as I have said, illogical, but it seemed to me and my advisers impossible to carry the thing to so fine a point as that. So we have said that where a man dies after the end of the year he has the full discharge, although there may not be overlap for the full period of seven or ten months as the case may be. My hon. Friend asked whether the point would remain open if the plea were rejected now. The answer to that is clearly "Yes; it can be raised subsequently," but it is only right that I should make clear to him, as I have done, what view I take of the merits of his proposal.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.

Orders of the Day — CLAUSE 4.—(Short title, construction and repeal.)

Amendment made: In page 6, line 1, leave out "Wage-earner's Income Tax," and insert "Income Tax (Employments)."—[Sir J. Anderson.]

Clause, as amended, ordered to stand part of the Bill.

Orders of the Day — NEW CLAUSE.—(Interpretation.)

In this Act except where the context otherwise requires the following expressions have the meanings hereby respectively assigned to them (that is to say):

"employment" means an employment the emoluments of which are assessable to income tax under Schedule E;

"pension" means a pension assessable to income tax under Schedule E or, by virtue of Section thirty-two of the Finance Act, 1921 (which relates to pensions payable out of certain superannuation funds) under Schedule D;

"service in or with the armed forces of the Crown" means—

(a) service in the armed forces of the Crown;
(b) in the case of a woman, service in any of the capacities mentioned in the Schedule to the National Service (No. 2) Act, 1941 (which defines, in relation to women, the exemption from the liability to be called up which corresponds to the exemption for men already serving in the armed forces);
(c) such other service, if any, in connection with the armed forces of the Crown as may be prescribed by regulations to be made by the Commissioners of Inland Revenue.—[Sir J. Anderson.]

Brought up, read the First and Second time, and added to the Bill.

Orders of the Day — NEW SCHEDULE.—(Conditions as to Emoluments and Pensions.)

Part I.

Emoluments.

1. A person shall be deemed to satisfy, as respects the year 1943–44, the conditions as to emoluments specified in this Part of this Schedule if and only if—

(a) he is, at some time during that year, in an employment which is relevant for the purposes of this Part of this Schedule; and
(b) the total emoluments received by him for that year from all such employments do not exceed six hundred pounds, any payments for overtime being left out of account:

Provided that if for any part of that year the person in question was not in any employment which is relevant for the purposes of this Part of this Schedule, the said limit of six hundred pounds shall be proportionately reduced.

2. The employments which are relevant for the purposes of this Part of this Schedule are all full-time employments except service in or with the armed forces of the Crown:

Provided that if, during the whole or any part of the year 1943–44, a person is not in any full-time employment but is in part-time employments (other than service in or with the armed forces of the Crown) which together take up his full time, those part-time employments shall, as respects the whole, or, as the case may be, that part, of that year, be deemed to be relevant for the purposes of this Part of this Schedule.

Part II.

Pensions.

1. A person shall be deemed to satisfy, as respects the year 1943–44, the conditions as to pensions specified in this Part of this Schedule if and only if, in the said year, he was in

receipt of a pension which is relevant for the purposes of this Part of this Schedule and the total amount of all such pensions received by him for that year does not exceed six hundred pounds:

Provided that if for any part of that year the person in question was not in receipt of any pension which is relevant for the purposes of this Part of this Schedule, the said limit of six hundred pounds shall be proportionately reduced.

2. The pensions which are relevant for the purposes of this Part of this Schedule are all pensions except pensions in respect of service in or with the armed forces of the Crown.—[Sir J. Anderson.]

Brought up, read the First and Second time, and added to the Bill.

Bill reported, with Amendments (changed to "Income Tax (Employments) Bill"); as amended, on re-committal, considered.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Mr. Pethick-Lawrence: Before we part with this Bill there are one or two things I would like to say. We may describe what has just been done as a postscript. The postscript is tied on to the Bill by the speech which the Chancellor of the Exchequer has made to-day. The Bill is going through this House with the postscript that we have the assurance that there will be, in effect, an Amendment made to the Bill during the next Session. It is on that understanding, which we are sure the Chancellor will implement, as he has undertaken to do, that the Bill is leaving this House. There is, however, one very small point which seems to me to be of some little substance and which we have not hitherto touched upon. If hon. Members will turn to paragraph 23 of the White Paper, they will find there set out the procedure which is contemplated in this Bill in regard to married women, and with regard to one of the matters therein contained the Chancellor may do well to look again. If I had not raised this question now and if the Chancellor were not to make that promise, he would be more or less bound by the precise terms of the White Paper in dealing with all the formal regulations that are therein contained in handling Income Tax.
There is one provision in paragraph 23 that needs consideration. The principal object of the Bill is that people should pay Income Tax as they earn it and that


there should be no arrears of taxations which would subsequently be brought up against them. But where you have the case of a married couple, both of whom are working, they are both having certain deductions made from their wages earned week by week. Against the deductions that are enforced upon them there are certain allowances. Those allowances consist of the personal allowance of the husband, the married allowance which is also granted to the husband and—I am assuming the case of the married women in work—there is the allowance to the married woman of £80 per annum as a working and earning married woman. So far, the question I wish to bring forward does not arise, but beyond that there are the two distinct rates at which Income Tax is charged. There is the rate which prevails for the next £165 of income at 6s. 6d. in the £ and the rate of 10s. on all income above that figure. According to our Income Tax law as it is at present, the incomes of the husband and wife are taken together, and as a couple they are entitled to this £165 at the lower rate of tax. The Inland Revenue were confronted with a question of how they were to deal with that in the case where both the husband and wife are at work. What they have done—and it would appear rather generous in a sense—is that they are prepared in the first instance and during the year to allow £165 both to the husband and to the wife for the time being with the intention at the end of the year of making the necessary adjustments. It is true that there will be a large number of cases where that does not raise any serious issue, for instance, in the case of members of the Forces, who are outside the provision altogether, and where the wife is earning just over £80, but where both the husband and the wife are in industrial employment and are both earning good wages there may be an over-allowance amounting to over £28.
Supposing that at the end of the period the wife ceases to work, then the husband in the ensuing period will suddenly find himself confronted with a bill for arrears amounting to over £28, or more than 10s. a week, for which he will become liable in the period following that in which his wife was working and was getting this £165 at the lower rate of tax. I have not raised this matter in order to press the Chancellor for a final decision to-day—it

is a complicated matter, and the amounts involved will vary; many will not be so much as £28—but I suggest that he gives it a little further attention. On this question of underpayment and overpayment of tax, the attitudes of the well-to-do person and the weekly wage-earner are exactly opposed. The well-to-do taxpayer is rather pleased in many cases if he is undercharged tax for a time and has to pay up later, whereas the working-class manual worker, or person in receipt of a weekly wage, would much rather pay too much at the time and get something back a little later. The suggestion I make is that this Bill, excellent as it is in other ways, is creating for the first time this arrear of taxation which for the kind of persons I am envisaging may be a very unfortunate thing and one which they would be the last to wish to occur. Personally, I should have thought that the problem might have been solved by giving, in the case of a married couple both at work, half the concession—£83 each—and allowing the adjustment to be made at the end of the period. It may be that there are difficulties in that suggestion and that that is not the best way to do it, but at any rate I am asking the Chancellor not to feel bound, by the publication of this White Paper and the passage of this Bill, to operate precisely the scheme which is referred to in paragraph 23. If he can say that he will reconsider the matter, that will meet me and, no doubt, other Members of the House.

Sir J. Anderson: I would like to deal first of all with the point which has just been raised by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence). The statement he has made to the House as to the effect of the proposal he has put forward is in every respect accurate. It was thought better, as a general rule, to allow a certain under-deduction and to make it good later. But I am certainly prepared to look at the matter again, and I should think that it would be possible, a any rate where the effect of under-deduction would be substantial, to arrange to make an estimated adjustment in advance. I think there would be technical difficulty in doing it exactly as my right hon. Friend suggested, because deductions are made in accordance with the tables, but I will gladly give my right hon. Friend the assurance


that I and my technical advisers will look at the matter again.
Before I sit down, might I express to my right hon. Friend particularly my gratitude for his assistance in carrying this Bill through and also my appreciation of the helpful attitude taken up by hon. Members in all quarters of the House? We have reason to congratulate ourselves on having been the means of putting on to the Statute Book a Measure which represents a very real advance in the technique of our Income Tax system. I am grateful to the House.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

PRICE CONTROL (REGULATION OF DISPOSAL OF STOCKS) BILL [Lords].

Order for Second Reading read.

The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): I beg to move, "That the Bill be now read a Second time."
This Bill has passed through another place and will, I think, serve a useful purpose in the regulation of the disposal of consumable goods. Section 9 of the Goods and Services (Price Control) Act, 1941, was designed to prevent traders from imposing conditions of gale or discriminating in an undesirable way in the sale of goods between one customer and another. But there are, quite clearly, a certain number of special cases where such discrimination may be desirable, and those classes of cases are set out in Section 9 of the Act. This provides that it is a defence for any trader who refuses to sell, or makes a condition of sale of, any goods if he can prove that to sell without condition, or sell at all, would be contrary to the normal practice of his business, would involve a breach of some obligation legally binding on him or would interfere with arrangements made by him for the orderly disposal of his stocks among his regular customers. I want to emphasise that nothing in this Bill makes it possible for the Board of Trade, by direction or by Order, to modify any of those defences. The Bill, in other words, extends and in no way curtails the freedom of the trader in this direction. Under the Defence Regulations, 1939, the Board

already has power to prohibit the sale of any specified commodity or to limit the sale of that commodity to those to whom it has issued permits.
But in many cases it is desirable not to go so far as that. The permit system has one obvious disadvantage; it freezes stocks in a trader's premises. The House will probably have in mind the case of rubber boots. When we lost Malaya it was thought necessary to stop the sale of rubber boots in the country as a whole, and an Order was made under the Defence Regulations limiting the sale of such boots to those who held permits. The result of that was that considerable stocks became frozen in the hands of many retailers who had a justifiable complaint which was only remedied when the stocks were collected and redistributed in a way which enabled those people most in need of them to buy them. There are, however, certain other commodities which, although especially necessary to certain sections of the community are in sufficient supply to allow a considerable residuum to be sold to consumers in general. As the law stands at present, it is impossible for any trader legally to discriminate in this sort of way. This Bill gives the Board of Trade power to issue licences allowing a trader—and I emphasise the word "allowing," because it is permissive and not compulsory—so to restrict his sales.
There are various cases in which these provisions will be of use. The Ministry of Works, for example, have a scheme by which paint is supplied to civilian customers who have special need for it. The Ministry of Health have a scheme by which the sale of hot-water bottles is limited to those who have medical needs, the Ministry of Fuel give priority for the purchase of paraffin to those who have no other means of lighting their houses and the Board of Trade, after serious air raids, have arrangements for restocking shops with essential household goods. It is clearly desirable that when these goods are put into the shops only those who are bombed out of their homes should have first call on them. But it is equally desirable that that call should be the first call, because there may be many cases where those not bombed out have as equal a necessity as the bombee. This Bill allows discretion to the retail trade in that particular regard. The House will agree that it would be undesir-


able to deal with such cases on the basis of a restrictive permit system. It is a great deal better to get the experienced collaboration of the retail trader who knows his district and his customers and their special requirements, and to allow him this discretionary power.
There are some words towards the end of the first Clause of this little Bill which I should like to explain. They are to the effect that the Board of Trade may issue licences authorising retail traders
to restrict sales from such stocks to particular classes of buyers or otherwise as may be specified in a licence or to impose conditions as may be specified therein on such sales notwithstanding anything in section nine of the said Act.
I believe it is thought in some parts of this House, and elsewhere, that by inserting the words "or otherwise," giving us power to impose other conditions in the licence, we are taking an unnecessary power of administration. I wish to make it clear that that Section of the Goods and Services Act, 1941, applies not only to retailers, but to manufacturers and wholesalers, and these words are inserted to allow manufacturers or wholesalers to make it a condition of sale that the retailer will sell only to certain classes of consumers.
As an example, take the case of thermos flasks. The House is aware that most consumable goods are in increasingly short supply. Thermos flasks are being made but not in sufficient quantities to allow everybody who wants a thermos flask to buy one. From time to time, certain sections of the community in certain districts, who have to take meals to work—potato pickers, hop pickers and certain industrial workers for example—have a special need for thermos flasks. In such cases, it is usual for the Board of Trade to ask the manufacturers to send a supply to a particular district for a particular purpose, and they want to be able to ask the retailers to give a prior right in the buying of these flasks to the people for whom they are intended. This Bill authorises the manufacturer to give a general instruction to his retailer, that there is to be preference for the particular category of people who most need the commodity concerned.

Dr. Russell Thomas: But it is still left to the discretion of the retail trader. Supposing the wholesaler

lays down the condition that the retailer is to sell these thermos flasks only to a particular class of people, it is entirely open to the retailer whether he observes the condition or not. It is really left to his honour. The condition may not be observed at all.

Captain Waterhouse: It is true that there is a certain discretion but, of course, the wholesaler or manufacturer sends the retailer the articles on the condition that he sells them only to a particular class of people. If he breaks that condition, it is true that the wholesaler cannot sue him for it. He just would not send that retailer another consignment.

Dr. Thomas: But how can he prove that the retailer has broken his conditions?

Captain Waterhouse: He can prove it only if the complaint of a shortage continues, and if specific complaints are brought either to the Board of Trade or the price regulation committee or the wholesaler himself. If people come forward and say, "We have gone into a shop where flasks were available a little while ago, and no flasks are available now," inquiries will be made, and it will be found whether or not the retailer has kept within the general request of his wholesaler. The point is that at present it is illegal for the wholesaler to make such a condition, or even such a request. That would be contrary to Section 9 of the original Act and under this Bill what is at present illegal will become legal and the wholesaler will be allowed to make that request.

Mr. Mathers: It has been quite usual for wholesalers to lay down such conditions upon retailers.

Captain Waterhouse: It has been usual in the past and we would like it to be usual again, but if they sought to do it now, they would, in fact, be breaking the law, unless they could say that it had been a normal practice in the business, coming under one of these special provisions.
I would like to give another example of why these words "or otherwise" are necessary. It is sometimes desirable to introduce a time for delivery into one of these licences. We have a system by which wholesalers collaborate with us in holding considerable stocks of essential


consumer goods for the benefit of people who are bombed out. They are emergency stock holders and they do not sell that part of their stock to the general public. We want to be able to put in the licence a provision enabling wholesalers to refuse to sell to their retail customers until such time as bombing necessity arises I hope the House will agree that these provisions are in no way onerous on the retailer. They are permissive and not mandatory and give a discretionary power which will be of use to the consumer, and I commend the Bill to the House.

Sir Herbert Williams: If my memory serves me aright, this Bill was introduced as a sequel to a Question which I put to my hon. and gallant Friend some weeks ago. One might say that it is designed to legalise what is commonly known as the "under-the-counter" trade, which is a particular brand of the black market. It is not necessarily evil on that account. It may be desirable to have a particular kind of black market to which certain people are granted special access. That is what the Bill is doing. A great many traders who have been abused for doing so, have really rendered considerable service by saying "I am going to keep certain classes of goods in short supply, in order to be able to supply those people who are, I know, particularly in need of them." Traders have, quite wrongly, been abused for doing something which is exceedingly sensible. There is another point. We all know that when we go into a shop in which we are regular customers we get much better treatment than we do in a shop where we are not regular customers. I am not criticising anybody for that. If I were a shopkeeper I should be inclined to treat my hon. and gallant Friend rather better, because I knew him, than I would some strange person who was unknown to me. That is natural and human, but here we are regulating it and now that we are proposing to regulate it I am not quite clear about the administrative side of the proposals. A licence is to be issued to the shopkeeper, apparently to enable him to distribute flasks. I do not know of what use the flasks are, unless you happen to have access to another black market where you can fill them, but that is another matter.

Mr. Mathers: They are thermos flasks.

Sir H. Williams: I beg pardon, I did not hear the word "thermos," and I did not realise that this Bill was being passed for the special benefit of the hon. Member and some other hon. Members who are patrons of thermos flasks. If the licences are to be granted to individual traders to sell certain things in a restricted way to a specified class of customers, then the fact ought to be publicly known. In other words, the licence ought to be displayed on the premises. Otherwise, many traders are going to be treated badly in public and private conversations because people will say "So and so is treating his customers differentially." Either the licence should be displayed, or some notice put up to the effect that the trader is an authorised distributor of certain goods to certain classes of customers, in order to protect the trader against the ill-will to which he might otherwise be subjected.
It would not be necessary, I suggest, to put any words into the Bill to that effect. The Bill is administrative, and the Board of Trade could authorise the recipient of a licence to put up a notice such as I have indicated. You have that with regard to motor tyres. The only people who can buy motor tyres are those who have an authority given, I think, on their motor licence form. If you want a tyre you get the authorisation and go to an authorised distributor. In this case the number of purchasers might be so large that the issue of a licence to each would be administratively top-heavy, and the Government quite properly are proposing to trust the traders to play fair. The way to make sure that the trader is playing fair is to do as I suggest, and thus turn the whole public into a friendly policeman while at the same time relieving the trader from attacks which might otherwise be made upon him because people did not realise that he had authority from the Board of Trade for what he was doing.
Certain of my hon. Friends have tabled two Amendments to this Bill, one of which, I think, is consequential on the other, and some reference has been made to the subject-matter of those Amendments by my hon. and gallant Friend The hon. Member in whose name those Amendments stand is not able to be present in the Chamber at the moment, and


if he does not turn up in time, I propose to take the opportunity of moving them formally.

Captain Waterhouse: We are only taking the Second Reading to-day.

Sir H. Williams: I beg pardon. In that case the statement which my hon. and gallant Friend has already made on this matter will be available to my hon. Friends, and they will then be able to consider whether it is necessary to proceed with these Amendments in Committee.

Sir Percy Harris: I intervene only because I think these small and apparently harmless Bills should be scrutinised before they are allowed to become Acts of Parliament. With the purpose and intention of the Bill we are all agreed. Certain essential commodities are in short supply, and we wish to be certain that, especially in the case of the medicinal goods, the supplies that are available reach the right people. But, in practice, I do not see how the Bill is to be enforced. The example was given of hot-water bottles and thermos flasks. We all know that in cases of sickness, these articles are very necessary and that it is not always possible to obtain them. I cannot see how it will be possible to enforce the provisions of this Bill. A chemist has a customer who says that he cannot sleep because of cold feet and that it is necessary for his health to have a hot-water bottle. The chemist supplies him, and afterwards there may be protests that other people who are really ill cannot obtain hot-water bottles, but I cannot see how any penalty can be imposed. This Measure is only the profession of an ideal.

Captain Waterhouse: At present it would be illegal for that shopkeeper to refuse to sell a hot-water bottle to anybody who came into the shop. Under this Bill he could refuse to sell. If a healthy person such as my right hon. Friend came into his shop, he would say, "No, Sir Percy, there is no chance of a hot-water bottle for you."

Sir P. Harris: In other words, there is nominal power. In practice, it will be impossible to enforce the provisions of the Bill in any effective way. Such legislation is rather a farce. Surely in the middle of the greatest war in history

Parliament could spend its time better than in passing Statutes which cannot be enforced. I do not think the House will obstruct the Board of Trade, but I think this Measure is rather a waste of time.

Mr. Hammersley: Listening to the agreeable and explanatory speech of my hon. and gallant Friend the Parliamentary Secretary one would think this was a very simple and innocuous Measure, and, indeed, it may be, but it may also be the thin end of the wedge. It may contain principles which are objectionable and ought not to be agreed to without careful consideration. Under certain circumstances it is desirable to give priority to particular classes of customers who have special needs. In the case of rubber boots, hot-water bottles and thermos flasks that may be reasonable, but it should also be noted that this Bill initiates the principle of discrimination. It allows the Board of Trade to say to a trader, "You can discriminate as to where you sell your goods." That is rather a new principle, and I am thinking of the Bill not so much from the point of view of what it contains as in the light of certain inferences and evidences in other directions. We were told to-day in reply to a Question that the disposal of all surplus goods—and I take it that surplus goods are covered by this Measure—will be carried out in each particular case through the agency of the Department mainly concerned with the supply of the goods during the war. A Government Department is to have control of the disposal of surplus goods, and apparently will be able to discriminate. Already there is in existence the Surplus Textiles Corporation. After making some inquiries I wrote to my right hon. Friend the President of the Board of Trade to ask for some information, but although I wrote on 20th October I have not yet had a reply.
I am authoritatively informed that the Surplus Textiles Corporation is being limited by guarantee and set up by persons prominently interested in the textile industry with the knowledge and approval of the Board of Trade, and that the Board of Trade have power to determine admission to membership. The House of Commons ought to look very carefully into that kind of thing. Here we are getting initiatory action allowing the Board of Trade to discriminate. Apparently they


are to set up various corporations through which surplus goods can be sold and are going to control the membership of those corporations. Without careful examination we may find that the membership is much too narrowly drawn, that a few selected persons, selected by vested interests, selected, as I understand it, because they were in the trade before, are to be the avenues through which these goods are sold. I should need a good deal of evidence before I was convinced that that was the right way to go about it. Although I am not objecting to this particular Measure, I am raising a word of caution lest we accept Measures of this kind without looking into them carefully. I hope that my hon. and gallant Friend the Parliamentary Secretary will be able to say to us that this is not a little nibble at a great problem which ought to be examined much more carefully before it is brought to the House, and will be able to remove some of the suspicions and feelings of distrust which have come into the minds of one or two of us since hearing of the formation of these disposal corporations. I hope that my hon. and gallant Friend will let us have some further information later.

Mr. Montague: This is one of those little Measures that may easily slip through Parliament without adequate consideration. I do not know how far I may he expressing the views of hon. Members behind me, but I think their attitude is likely to be one of suspicion for much the same reasons as were expressed by the hon. Member for East Willesden (Mr. Hammersley). As I understand the Bill, it enables the Board of Trade to decide upon the necessity for certain types of commodities to be restricted to people who are judged to be in special need of them. If the Board of Trade have come to the conclusion from the information in their possession that they ought to have that power, I think they ought to take more than this permissive Measure. The method seems to be undesirable, and I am inclined to think it is likely to be inoperative in practice as well as dangerous. It is dangerous in so far as it opens the way to certain classes of tradespeople to consider the privileges of special customers. It will put behind them the authority of an Act of Parliament, and it will lead to a feeling among the general run of customers that something underhand is being done. Permissive legislation of this character appears

to me to be bad in principle, and I am sure we should all like to hear more from the Board of Trade to justify this new departure in legislation. Either it is necessary that powers should be taken by the Board of Trade to restrict the sale of certain commodities to particular types of persons or it is unnecessary. If it is necessary then the Board of Trade should be able to deal through the customer and not through the wholesaler or retailer, not leaving things to the honour of the retailer or the wholesaler but adopting that type of regulation which is already operative throughout the whole range of price controls in war. I express these few ideas because we feel very uncertain about a Measure of this character, and we should like to have more reasons why we should support a Bill which gives permission, and only permission, to types of traders who are not perhaps representative of the trading community in general—I should hope that was not the case—but who do exist and who do create a great amount of suspicion among people that they are not being treated fairly but are put upon a differential basis.

Mr. Evelyn Walkden: I am sure that the Parliamentary Secretary will not be able to report to his chief that this Bill has had a favourable reception. There are misgivings about what it sets out to do, and we have every reason to run the tooth comb through the Bill and express our concern. We should ask ourselves, "Will a Bill like this distribute commodities more equitably to the masses of the people and will it guarantee fair and square apportionment of goods which are in short supply?" I say definitely that I do not think it will. It is more likely to create a monopoly for a few persons. The right hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) referred to hot-water bottles, thermos flasks and medicinal supplies. I do not know whether he can tell me where a hot water bottle can he bought in Bethnal Green. They are to be obtained in different places, but not in the shops where they were usually obtainable before the war. If a lady wants to buy press studs, the fasteners which go to the general make-up of a lady's dress, she does not go to a haberdasher or a draper now. She goes to the hucksters in Oxford Street, or those people standing in doorways with little trays of odds and ends. They have acquired


a corner in all those goods. Instead of a penny a dozen or a penny for three dozen, they are now 1s. 6d. a dozen—and they are not to be obtained from the proper shops. We should think in terms of gathering up these commodities, parcelling them out to the appropriate quarters and seeing that they are distributed more equitably.
The President of the Board of Trade knows that nowadays thermos flasks are not to be bought at the shops where we were accustomed to go for them, but you can purchase them by the backstairs system. I heard about a window-cleaning company who had purchased and are selling 4,000 gallons of alcoholic ginger wine. They are not registered traders. If the Bill would cause goods to go into the normal channels of trade and reach the consumer more equitably, I should press for it, but it will not. I know that the Board of Trade does not deal with whisky, but I would ask the Parliamentary Secretary to inform this House where a bottle of whisky can be obtained to-day for under 40s. or two guineas. It is a well-known fact that the brewers distribute their quota roughly at 23s. a bottle to the tied houses and licensed victuallers. They say, "That is the price for your quota. If you want double the amount, you may have it, but not from your quota, at 37s. a bottle." The Chancellor of the Exchequer gets 18s. 3d. a bottle in both cases. The brewers are helping to cheat the nation because the retailer has to pass the cost on to the consumers. This kind of cheating is generally recognised and will not be controlled by this or by any other Bill. I am concerned that supplies of whisky, hot-water bottles, thermos flasks and any other commodity, should be available to the retailers and consumers.
The Parliamentary Secretary mentioned the question of priorities and rubber boots. I assure him that to-day one does not go to a boot and shoe retailer for rubber boots, which are sold by persons who are not registered to sell them. Everybody knows it in every town. The people who call themselves business people know where these stocks are held. The investigations and examinations of stocks referred to by the hon. and gallant Gentleman will not touch this matter and will not bring the goods to the consumer in more equitable manner. The Bill will only

tinker with the matter, and the public will wonder why we are wasting our time with it. I hope that the Bill will not reach the Committee stage, and I believe it is a waste of time.

Dr. Russell Thomas: Having listened for some time to a continuous spate of oratory from the left, I am bound to say from the right that I am in agreement with the last words of the last speaker. I listened carefully to the Parliamentary Secretary, and although I do not like controls, I have come to the conclusion, if I might use an expression which I hope is Parliamentary, that the Bill is bilge. The advantage of the Bill, it seems, is that it tends under certain circumstances and in regard to certain commodities, to free trade by removing the necessity for licences. It does in actual fact allow the trader to do more or less what he likes. Beyond moral aspirations, no sanctions, practically speaking, can be used against the trader at all. I believe there was a sort of trade control which could be used by manufacturers and wholesalers before the war, but in actual fact their effect in war-time would be practically negligible. I was amused to hear the expressions of the right hon. Gentleman the Member for South West Bethnal Green (Sir P. Harris) in regard to the freeing of trade. Under normal circumstances I am sure he would not have made them.
The Parliamentary Secretary suggested that what he called "bombees" would be served first. Incidentally, may I respectfully say that I was surprised that the hon. Gentleman should defile the atmosphere of the Commons House of Parliament by the use of such a word, I hope we shall hear no more of them. But what claim will the "bombee," as he calls him, actually have? What method can he use to justify his claim for priority? As I have said, the Bill in actual fact tends more or less to free trade, and the hon. Member for South Croydon (Sir H. Williams) was not far wrong when he said that in effect the Bill goes a long way to legalise under-counter trade, which is proceeding with much satisfaction to some at the present time.

Mr. R. C. Morrison: The Bill is a mistake. The person who drafted it probably has no knowledge of the subject and has not considered its effect on the psychology of the people.


One of the main grievances and causes of irritation, particularly in industrial districts is that shopkeepers do not treat everybody alike but give the goods to the people who have been good customers in the past, and are likely to be good customers in the future. A man came to me complaining that he had a job which necessitated frequent change of working hours, and he wanted an alarm clock. He knew one or two places where he felt sure the shopkeepers had them, but they would not part with them to him, because he did not fulfil certain requirements. He therefore tried to find out, first, the shops which had alarm clocks and, secondly, somebody who was a good customer there and who could get him one. This kind of legislation is simply driving people to deceit. It is building up a form of deceit. The Measure is undesirable because it will give the shopkeeper the opportunity of putting things under the counter and selling them to their best customers.

Mr. Woods: Suspicion is inevitable when legislation is framed in a way which will cause considerable uneasiness throughout the country, without solving any of the problems. We all appreciate that some commodities are in short supply, but the reasons for the short supply should be dealt with. It should be the primary obligation of the Government to see that proper facilities are given for producing sufficient of the things that are necessary for life, in order to meet the need. Restrictions proposed by the Bill give an opportunity for the doling out of goods to selected interests or parties. In 99 cases out of 100 the shopkeeper plays a straight game, but he is soon going to realise that some people, with more time than they ought to have, go round to various shops to get what they want. The average trader says, "This is my quota, liberated to meet my normal requirements," and that attitude is entirely commendable. In a rough and ready way it solved the problem.
The whole matter is aggravated by the Bill. The Board of Trade should get busy with the fact that in some subtle way supplies of commodities get into channels which normally do not deal with those commodities. The Bill does not touch that position at all. I can imagine it causing a great deal of inconvenience to the normal trader and the consuming public, without hindering those people who are

now becoming possessed of goods which are in short supply, and who exploit the public by getting round the price regulations. We object to this type of legislation. It is too vague and nebulous. Under it almost anything could happen. There is no guarantee to anybody that the problems which really confront us will be straightened out after all. The House does not need to be reminded that this is the fifth November of the war. It is very late in the day to ask for powers such as this Bill would give.
Let us take an illustration of what might happen under this Bill. Certain supplies might be allocated and licences given. We all know what happens when there are licences and arrangements for the distribution of certain stocks. This case did not come under the hon. and gallant Gentleman's Department, but in the case of the liberation of a certain supply of paint for domestic purposes, which came under another Department, it was allocated, and one of the largest distributors of paint throughout the country on the first allocation did not get one single tin of paint, which would have meant that departments would have been closed. That was put right, but that sort of thing can happen indefinitely. There will be a scramble for licences, all the backstairs methods of bringing influence to hear to secure the necessary licences and permits, so that those who got them would have exclusive rights to dispose of certain stocks and all the other traders would be out of stocks presumably. In the interests of equity as well as in the interests of the good name of this House, I think the Government should look at this type of legislation and give us something much more definite and make it much more clear what can and cannot be done under Regulations, before this House is asked to give a Bill of this type a Second Reading.

Sir Edward Campbell: I have listened to all the speeches, and it is a remarkable thing that so many Members seem to accuse every trader of being dishonest. [Interruption.] Every speech I have heard—and Member will only have to read Hansard to-morrow—has accused traders of being dishonest.

Mr. Woods: If anything I have said has given that impression, I am sorry; it was quite unintentional. I tried as well as I could to pay my tribute to the average


honesty of the average British trader of all time. They are all up against difficult problems and are trying to play the game. The whole position is complicated by a small number of people not normally in the trading business who come in, get hold of stocks in short supply and bring discredit on the whole industry with which they are not normally associated.

Sir E. Campbell: I am glad the hon. Member rather changed the tone of his speech. I maintain that the majority of traders are very honest, [HON. MEMBERS: "We agree."] I am very glad that everybody agrees. In view of the fact that we all agree, I cannot see why hon. Members do not allow the passage of this Bill which my hon. and gallant Friend has explained to us as being necessary owing to the war. We all know that there are certain communities who need certain things more than other communities, and the Board of Trade are endeavouring to see that those people who need the things most should be those who get them. [An HON. MEMBER: "This does not do it."] I maintain that though it cannot be all we should wish, it is drafted to the best of the ability of those in charge of this Department, and therefore I heartily support it, but I do not wish, which I am perfectly sure will be the case, that the criticism of this Bill should tend to make the traders think that the House of Commons does not think as highly of them as they should be thought of.

Mr. Mcsser: The Bill does not do what the last speaker says. I do not intend to cast any reflection on the traders at all in what I shall say. It is quite an unfair responsibility to put on them. Take medical supplies, for instance. We have to leave it to the shopkeepers to determine who is the one who more particularly needs the medical requirements. From that standpoint alone, I think it is wrong. When you once start on legislation of this description, where does it lead us? You cannot leave this to just one section. It means that you are setting a precedent. What you are doing in fact is to remove a measure of control which has protected the people where there have been goods. People have been entitled to have them. What is going to happen now is that the shopkeepers are almost bound to study to

whom they are going to supply these goods, and because of that discrimination that cannot help being unjust. In this instance the Bill will do not good but harm.

Mr. Hubert Beaumont: This Bill has not had the enthusiastic reception which the Parliamentary Secretary had hoped. It seems that this Bill simply legalises preferential treatment. This Bill may make the cure worse than the disease itself, and it does not seem to meet the point. I would like to ask the Parliamentary Secretary this: A certain retailer receives a supply of, say, thermos flasks on condition that he supplies them to a certain category of people. The retailer does not carry out that obligation, and the Parliamentary Secretary says that the remedy will then he for the manufacturer or wholesaler to refuse him any additional supplies. But what is to prevent another manufacturer or wholesaler who has been endeavouring in the past to get the custom of this particular retailer himself supplying the retailer who may have committed an offence? It does not seem to me that the Bill meets the case. It is perfectly true that there are a number of articles in short supply, and there are a number of people in greater need of them than is any other section of the community. That being so, it is up to the Board of Trade to devise some system whereby the onus is not to be placed upon the trader himself. It is quite unfair to make the trader responsible for incurring the displeasure of his customers. The trader at the present time can say, "Yes" or "No", as it should be. I think we should have some measure which would make it illegal for the trader to supply anything to anybody of this particular kind unless they actually come within the category. I suggest that the Parliamentary Secretary may think it wise to take back this Bill for further consideration, and if he can come to the House with a Bill which will actually meet the point, he will not get the frigid reception which he has met to-day but a warm welcome.

Mr. Montague: May I stress that point, as to whether the hon. and gallant Gentleman will take back the Bill and reconsider it? We do not wish to force a Division, but it does seem that there will be a considerable measure of opposition.

Mr. Levy: We have had many discussions regarding bureaucracy. If ever there was a case where bureaucracy has run wild, this is the case. So far as I am concerned, I think that this Bill ought to be withdrawn. It does not make sense. It is playing into the hands of the bureaucracy. It is undoubtedly not in the best interests of the country, whether shopkeepers or the general community. I only rise to say that, so far as I am concerned, if this Bill goes to a Division, I shall be bound to vote against it.

Captain Waterhouse: If I may have the permission of the House to make a few remarks in answer to this Debate, I should like first to express some regret that I was at a disadvantage in that many hon. Members who have since criticised this short Measure were not able to be in the House when I was doing my best to explain it. Really a great deal too much has been read into it, and it is a case of great expectations with a vengeance. Almost every Member of the House who has spoken has said what it has not done. It does not control the sale of alcoholic ginger wine; it does not control the price of whisky; it does not do a host of things; but I did in a very humble way speak of it as being a simple and rather humble Bill. It is designed with one object and one object only, a permissive and not a restrictive object. It seemed to me that some Members, for example, the hon. Member for Finsbury (Mr. Woods), got quite a wrong impression. He asked why I came to the House in the fifth year of the war asking for powers. That is precisely what I am not doing. I am making some move towards smaller powers, surrendering powers. I am one of those who do not want to see increased powers of trade direction. I trust the traders of this country, and I am amazed to find how little trust is placed in the traders of the country by many of those who profess to be their friends. From what has been heard, one would think one was dealing with the greatest lot of crooks let out of Brixton. They are not. It might be thought that every shop had more under the counter than on it, that every trader was out to do any honest purchaser out of the right to buy what he has in the shop. That is not so.
The hon. Member for South Croydon (Sir H. Williams) unfortunately used the

phrase "black market" in opening his remarks. Otherwise his remarks were some of the few friendly remarks on the Bill. To use the term "black market" in this connection is entirely a misnomer. There is no question of black market in reserving certain things for those who most need them. "Black marketeer" is as foul a phrase as you can use to anybody in time of war. They are condemned from every section of the trade and every section of the public. Here we are asking the honest traders to give us their help and collaboration. We can if we like—I think hon. Members who were not able to be here earlier may have failed to take this point—restrict the sale of anything under the Defence Regulations, to permit holders, and we do that in a good number of cases, but there are cases in which the permit system is tar too narrow. If under the permit system a man wants to be dishonest and sells a thing by the back door, he can do it unless he happens to be caught. With the best will in the world—and thank goodness we have not the will—we have not a policeman outside the back door of every trader; we trust them. We have the power when we like to issue permits to stop the sale of anything except under permit. We use that when necessary. There are many other cases when this is not necessary, but where we do want to give the trader discretion to give priority to certain classes of customer.
We desire to say to the trader, "Will you keep certain things for certain people? When you think you have enough—you know your customers and your district—you can sell to other customers as well," and in such a case my hon. Friend might come in for a hot-water bottle, because there was a sufficient number about. It is not unreasonable to say that we will trust the traders with this power. When my hon. Friend talked about an increase of bureaucracy, he must have completely misunderstood the whole purport and intention of the Bill. It is giving discretion to those whom we think are worthy of it.

Question, "That the Bill be now read a Second time," put, and agreed to. Bill read a Second time.

Bill committed to a Committee of the Whole House, for the next Sitting Day.—[Captain McEwen.]

WATER UNDERTAKINGS BILL [Lords]

Order read for resuming Adjourned Debate on Question [28th October], "That the Bill be now read a Second time."

Mr. Ammon: Might I ask whether the Government really propose to proceed with this Bill at this late hour? It is a very highly controversial Bill, and to take it piecemeal in this way is certainly not doing credit to the Bill, nor is it paying a compliment to the House. I suggest that the Minister might see his way to withdraw it.

The Minister of Health (Mr. Ernest Brown): I beg to move, "That the Debate be now adjourned."
The House will know that the Government have been watching with interest the course of Business in the next day or two. I, particularly, have been noting with interest the growing list of Amendments for the Committee stage of the Bill. Events have put me in a dilemma. Like most Members of the House, I detest waste. On the one hand, I have a Bill here which is the result of a great deal of hard labour on the part of the joint Select Committee. On the other hand, I am always reluctant to ask the House to go through labours unless they can see the fruits of their labours. It is perfectly clear, in view of the statement which was made at Question Time by my right hon. Friend the Deputy Prime Minister, that we ought not to proceed with the Second Reading at this late hour. In view of the necessity to wind up the Session early, the Government have decided not to proceed with the Bill this Session. I hope to have conversations with those who have indicated points of view other than those contained in the Amendments.

Mr. Ammon: We are very grateful to the Minister for meeting what I am sure are the wishes of the House.

Question, "That the Debate be now adjourned," put, and agreed to.

INDUSTRIAL DISPUTES (EMPLOYERS' RESPONSIBILITY)

Motion made, and Question proposed, "That this House do now adjourn."—[Captain McEwen.]

Commander Sir Archibald Southby: I am sorry that the Minister of Labour is not on the Front bench because I gave him notice that I would be raising this matter on the Adjournment today. On 24th September, the last day of the Debate on Man- and Woman-power, the Minister of Labour said:
Some strikes are deliberately provoked for ulterior reasons by employers. I have known strikes, even in this war, in which the desideratum has been to create conditions to alter contracts."—[OFFICIAL REPORT, 24th September, 1943; col. 665, Vol. 392.]
That was a very serious statement. I would like to assure the House, and I would assure the right hon. Gentleman if he were present, that this is in no way a personal attack upon him. I have a great regard for him. But on 14th October I asked him whether he would give the names of employers who have deliberately provoked strikes for ulterior reasons. His reply was succinct: one might almost say that it was tart; it was one word, "No." I asked whether he could say why not. His reply was that he could not add anything to what he had said. It would be possible of course to add a great deal to the word "No." I asked why, in that case, he had made the allegation that he made recently in the House. He refused to give any further information. I raise this matter because I think it is very important. Members who have made general allegations in this House have always been called upon, rightly, to substantiate those allegations. We have, as Members of Parliament, a very great privilege, and a very great responsibility as well. Nothing that we say in this House can be the subject of proceedings against us outside. That lays upon Members the obligation to say nothing in this House which is not in the public interest and which cannot be substantiated.
There are two possible reasons why this statement has been made. It may be that it is true that there have been employers who have deliberately fomented strikes. I must confess that I find that hard to believe. But if that were so, undoubtedly in war-time they should be proceeded against with the utmost rigour of the law. Anybody, whether master or man, who promotes a strike with an ulterior motive in war-time is an enemy of the State, and should be proceeded against without fear or favour, wherever or whoever he may be. I think


we are all agreed on that. There may be another reason. The Debate was on the call-up of women of a certain age. I might say, in passing, that it seems to me a bad sign of modern tendencies that we have Debates on a subject like that, which are much heralded in the Press, to which great public attention has been drawn, and then the Debates take place not on a specific Motion on which Members can express a view but on the Motion for the Adjournment of the House. In that particular Debate, the whole country thought that we were discussing whether women of 45 to 50 should be called up. They expected Members to take a definite view one way or the other, and to express their view in the Lobby. The interest which had been aroused in the country was considerable; it was a matter which touched the homes of the people very nearly. Yet the Debate took place on the Motion for the Adjournment, so that no real division was possible. That is very bad. It tends to bring the proceedings of this House into disrepute, and to lower the prestige of Parliament and of Members of Parliament. It should be possible to debate a subject on a specific Motion if the Motion is backed by a sufficient number of Members. Previous Governments would always have found time for debating a Motion which had 200 or 300 signatures—and there are a number of such Motions appearing on the Order Paper now—and if they felt that such a Motion touched the confidence of the House in the Government they would of course have expressed a view as to whether the division was a matter of confidence or the reverse.
In this case, the Minister of Labour may have had in mind the desire to make this statement for party propaganda purposes. Hon. Members opposite will, I know, always acquit me of any desire to say anything rude or unpleasant, but I want to put the position as I see it. If that was so, it was an exceedingly wrong statement to make in this House. The Minister, alas, is not here. He cannot complain that he did not have warning, because I wrote to him on 14th October, and said that I proposed to raise the matter on this, the first occasion open to me, and I have his letter, saying that so far as he was concerned, 2nd November would be quite convenient.

Mr. George Griffiths: He expected the matter to come up at five o'clock.

Sir A. Southby: I expected it to be five o'clock, but I took the trouble to be here. So far as these matters are concerned, we are all equal in this House, Front Bench or Back Bench. The Minister has the advantage of having a P.P.S., who can sit here and tell him what is going on, while I have not. If then there is any fault, the fault of the Minister is greater than the fault of the back-bencher. But, no doubt, he has an excellent reason for not being here. His was a very damaging statement. If it is wrong for a private Member to make allegations during a Debate without being prepared to substantiate them, it is doubly wrong for a Minister of the Crown, speaking from the Front Bench, with all the weight which must be given to his words.
I suppose that no man in the country at present, the Prime Minister excepted, has greater powers than the Minister of Labour. He can reach out of his bath, pick up a pencil and paper, and direct a new age group of men and women into factories, under penalties. No other Minister can do that. If you want to call up another age group for the Army, it must be done by Proclamation, and can be discussed in this House. It should be more imperative for him than for anybody else to weigh his words carefully, and not to make a statement of this damaging character in this House, because such a statement insults every employer of labour in the country, be he good or bad. Nobody knows whom he has in mind. This statement should never have been made by him or, if it was justified—I only hope to hear from him that it was justified—he should institute proceedings in the courts against these people who have committed this crime against the State in war-time. It should be incumbent upon every Member of this House, and particularly upon Ministers of the Crown, who, in the public interest, make damaging allegations of this kind, to tell the House upon what ground the allegations are made. I have no desire to make a personal attack upon the right hon. Gentleman. I am only sorry that he is not here. I should have made the same speech if he had been here.
I think this House should demand from Ministers, no less than from back benchers, that when they make a statement of this kind they must, unless there is a security reason to the contrary, be prepared to substantiate it. Employers of this country, at present, lie under the serious implication that among their number there are those who have so far forgotten their duty to their country in wartime as deliberately to engineer strikes in their factories. The House and the country have a right to know the names of these men. If he is not prepared to give the names, the right hon. Gentleman should withdraw his allegation publicly in this House, and clear the good name of those men who have been lying under this allegation for so long.

Mr. Colegate: I rise to support the hon. and gallant Member for Epsom (Sir A. Southby) in his protest against the vague accusation to which he has drawn attention. It is absolutely essential that every Member of this House, at the present time particularly, should avoid wild or general accusations founded on versions of the facts which are not then at the disposal of the House, or are not afterwards given. It is a growing habit in certain quarters to do this. We have heard accusations against miners and mine-owners which have proved, on inquiry, to be totally untrue. We have frequently had accusations made that certain employers are not helping the war effort, and when we have asked for particulars we have not been supplied with them. I would draw attention to the particular case in which the allegation was made that certain mine-owners were working certain seams in order to advantage their pockets and to disadvantage the nation's war effort. We have not had one single case given.

Mr. G. Griffiths: Did not I state a case here last week of a firm that was fined £50 at Glasgow for preventing 600 men working for nine days or 5,400 working shifts? It was in the papers and I said this on the Floor of this House.

Mr. Colegate: I was not present when the hon. Member made that accusation, but what I am stating is true, that no official confirmation of any of these accusations has been given. Because a thing appears in the papers, it is not necessarily

confirmed. The only way of confirming an accusation against either employees or employers is by the official Department concerned confirming it, and, as my hon. and gallant Friend points out, taking the necessary action if the case is one that ought to be investigated by the courts.

Mr. Kirkwood: Will the hon. Member be good enough to put before the House the statement that has been made? We have not had the actual statement but something that was taken out of its context.

Sir A. Southby: By the leave of the House, I will read out the statement. It was as follows:
Strikes are divided into several categories. Some strikes are deliberately provoked for ulterior reasons by employers.

Mr. Colegate: The words which my hon. and gallant Friend has just read out make a very serious accusation which should have been followed up by prosecution, and it would be better still if the Minister of Labour would give information as to who these employers are. In many ways, it would have been a more serious punishment for such a person to be named in this House than to be taken into court. If we are to get through this war it must be with the minimum of industrial friction. That is admitted on all sides of the House to be one of the objects for which we are working. I do justice to hon. Members opposite in saying that a great many of them have done very well in trying to avoid industrial friction and a great debt is due, particularly in certain industries, to trades union representatives for their efforts to avoid industrial friction. It is very disconcerting, when an effort is being made to obtain that good will which is so necessary for the war effort, to have a Minister of the Crown introducing an element of suspicion not backed up by any details or specific facts whatever. It may be that the Minister of Labour is now about to tell us who these people are, but I cannot conceive that anybody to-day who is widely acquainted with industrialists, and the work that is being done in the war effort, can believe that there are employers who would deliberately provoke a strike, damaging the war effort, in order to obtain some ulterior advantage of their own. Therefore, I would join my hon. and gallant Friend in asking the Minister of Labour to give us some explana-


tion of this statement and to assure us that, if it is based on facts, the necessary prosecutions are being undertaken.

Mr. George Griffiths: I am amazed at the hon. Member for The Wrekin (Mr. Colegate). I brought forward a case. I brought the paper here and read it out from these benches. I stated at the time that the firm in question was fined only £50 in respect of men losing 5,400 shifts. Nobody knows the circumstances better than the hon. Member as far as mining is concerned and if he will read his own speech on the mining Debate and what he had to say about absenteeism and a good many other things, he will realise that there is a difference between strikes and lock-outs. We do not call them strikes, when the bosses lock the men out, we call them lock-outs. Some folks do not know the difference between a strike and a lock-out.

Mr. Colegate: Is the hon. Member claiming that there has been a lock-out in the mining industry during the war?

Mr. Griffiths: No, but there is a scientific way by which the managers so manipulate a lock-out, that it becomes a strike. We have one in Yorkshire at the Hatfield Main Colliery at the present time where the men have been trying to get their case settled for weeks on end. The men have continued to endure it and now they have said, "We are not going on any longer unless we are paid for what we are doing." That is what I call provoking a strike. The hon. and gallant Member for Epsom (Sir A. Southby) has been fair and square in what he said. He has put his case but the Minister, not having been here the whole of the time, has not heard everything he said. Let me tell the hon. Member for The Wrekin that the mining community is seething with discontent all over the country. I have been into my own Division this week-end and met my own people on this compensation business and they are very bitter about it. There are cases in our industry—we are not speaking from a book but from experience—where the owners will not pay up to the price list. Men have gone without their rights for weeks on end, and at the finish they have said, "We are not going to do any more until it is settled." The Minister of Labour and the Minister of Fuel and Power say that there is machinery to manage this business but

the provision of machinery to manage it does not feed the wives and families of the men. The machinery is too slow and it makes men throw down their tools. The owners are largely responsible for men going on strike. I have no more to say about it to-day.

Mr. Foster: The hon. and gallant Member for Epsom (Sir A. Southby) is entitled to bring this matter before the House but it is rather singular that the only complaint he has made is in regard to the statement of the Minister of Labour, in respect of employers. He has not raised any point about charges made against the workers themselves. Charges have been made in this House from time to time that there are workers who cause strikes for ulterior motives and political motives. But no one has thought fit to ask any Member or Minister who has made such a statement to prove his case. I do not know what the Minister of Labour had in mind when he made his serious and responsible statement, but when such statements are made some evidence should be brought. In my view the Minister's statement is perfectly correct. Some of us know that there are employers who have deliberately provoked stoppages—I will not call them strikes—by making attacks upon conditions of price lists or payments far certain work. They have done it in various ways.
The mining industry has been mentioned. Since the change for the better in the military situation the attitude of employers in general seems to have hardened towards the workers. At the present time, they are resorting to peace-time methods of dealing with their employees. In the coal industry it is quite a common thing to-day for the management to say to a worker who complains, "Get out of the pit." If he does so, sometimes his mates follow him and there is a loss of output. An action of that kind is described, under the Essential Work Order, as a dispute and the men cannot qualify for the guaranteed wage because it is said that they are responsible for the action taken. That kind of trouble goes on with the result that thousands of man-shifts are being lost in the mining industry today, due to the provocation I have mentioned.
What we have to do is to define what is meant by strikes. There is a definition under the Essential Work Order. Is it a


strike if an employer sends a workman from his employment because of some action he thinks the workman may have done? Is it a strike when the employer causes, say, 50 or 100 men to lose a day's work or a week's work or by provocation causes men to leave their work? In essence, the statement of the Minister of Labour is true in every respect and can be proved up to the hilt. In a longer Debate one could bring instances from the mining industry which would prove the case. I know that there are exceptions, but I believe that the coalowners as a class are doing their utmost to discredit the present form of control of their industry. They can do it in a thousand and one ways. They have their eyes on the post-war position. They are just as anxious to discredit the present form of control, as they were to discredit the control that applied in the last war and then use it as propaganda against nationalisation of the mines. Although hon. Members opposite may smile we have ample evidence of this.
We do not make these statements out of sheer prejudice towards the coalowners; we make them because we know that we can bring evidence to prove that what we are saying is true. I could show that in the mining industry the coalowners have exploited the present form of control when it suited them, have discredited it when it did not suit them, have exploited the guaranteed wage fund to save the cost of production and have not paid the guaranteed wage to workmen. By means of all this, they have lost thousands of tons of coal to the country. I only wish that we had the same power to prosecute employers as we have to prosecute workmen. We would be able to prove that the employers have lost thousands of tons of coal every week. While agreeing that these are statements which ought to be proved, I hope that if they are to be proved in the case of employers they will also be proved when the charge is against the workmen.

It being after the hour appointed for the interruption of Business, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Major Sir James Edmondson.]

Mr. Lipson: I cannot help thinking that the hon. Member for Wigan (Mr. Foster) has travelled rather a long way from the issue raised by my hon. and gallant Friend the Member for Epsom (Sir A. Southby). The important point is not whether the facts as stated are true or not but whether, if a charge like this is made, it should be an anonymous charge, a general charge, or whether the culprit should be specifically named. That, I think, is the reply to the hon. Member for Hemsworth (Mr. G. Griffiths) who seemed to think that he had met the case by quoting an instance where an employer had been prosecuted and details had been given in the newspapers. But that was not an anonymous case. The name of that employer was broadcast throughout the length and breadth of the land and what we ask is that when charges of this kind are made, the particular offenders' names, if asked for, should be given in this House. We ask this because it is the way in which hon. Members themselves are treated by Ministers. When sometimes an hon. Member has put a Question or made a statement the reply of the Minister is, "If you give me a specific instance of the charge you make I will investigate it." That, I think, is a perfectly proper reply and one which has been very frequently used by the Minister of Labour. It is no use coming to this House and making wild and general statements. I appeal to the Minister to admit that anonymous charges of this kind are undesirable. It is unfair to the great majority of employers who are trying their best to make a good contribution to the war effort. A general charge of this kind tars them all with the same brush. I hope the Minister will be big enough to recognise that he made a mistake and that as a result of the appeals which have been made to him, he will reconsider his decision.

Mr. McLean Watson: During the recent Debate on the coal situation an hon. and gallant Member alleged that in Scotland machine men were working two or three hours less than the regulation time. I challenged him to say where those fortunate men are, but to this hour I do not know where they are to be found. Not even the county where the colliery was situated was indicated. All the machine men I know are working full time. The colliery companies see to it that sufficient work is set


out to ensure that during the whole of the shift they are busily engaged, so there is not very much in the point made by the hon. Member for Cheltenham (Mr. Lipson). The hon. Member for The Wrekin (Mr. Colegate) adopted the usual pose of the colliery owner—innocent, perfectly innocent. Colliery owners have never at any time done anything for which they need be ashamed or make any apology. They are kind to the workmen, most considerate, and that is most extraordinary because the miner is represented as greedy and lazy; all the bad attributes are the possession of the miner, but the colliery owner is different. We are familiar with that pose, and yet it is the colliery owners who are at the root of all the troubles we have in the coalfields and all we have had for many years. The right hon. Gentleman was quite right in saying that employers have provoked strikes. Of course they do not hold meetings of the men and deliberately ask them to go out on strike, but there are a thousand different ways of doing it. There are pin-pricks day after day which provoke men to take certain action.
Does any hon. Member on this side or the other believe that all the trouble in the Nottingham coalfield was caused because a boy was directed to go underground? Does anybody believe that? That was simply the last straw, and before that last straw was put on the camel's back there were widespread burdens in the whole of that area that were really the cause of the trouble. In Lanarkshire we had a number of strikes. Again, does anybody believe they were caused because a few miners were arrested for refusing to pay fines? That was only the culmination of a whole series of incidents and conditions existing beforehand. Things had reached a point when the men refused to go on any longer. Even in these times, when the Government are so anxious to get coal, matters which ought to have come up for settlement are delayed and delayed, not because of anything the men do but because of the action of the employers. The delays go on until a stoppage occurs. Again it is the men who are to blame. The innocent employers walk away and pretend that they are interested only in increasing production and assisting the war effort. My right hon. Friend was perfectly right when he said there are employers who provoke strikes. I am not making that

charge against the general run of employers. The majority are anxious to see their works going well, but there are exceptions. [An hon. Member: "Who are they?"] Hon. Members should look where the trouble is. Where there is trouble from time to time they will find the employers are largely to blame for the trouble that has been caused. Where there are strikes and disputes there they will find employers who are creating conditions that cause strikes. It is the miners whom I know best, and I do not know the miner who likes to lose a shift. He wants to get to his work. It has been characteristic of the mining industry all through. We have good reason to air, on the Floor of this House, the attitude that has been taken up consistently for years back by these people. If they really were concerned about the getting the best out of industry they could make things very different from what they are to-day. I am pleased that the hon. and gallant Member for Epsom has raised this matter, because it gives us again an opportunity of drawing attention to the fact that the colliery owners should change their attitude.

The Minister of Labour (Mr. Ernest Bevin): I apologise to my hon. and gallant Friend for not being in my place at 4.30. I had been in touch with the Whips' Office all the afternoon. While trying to deal with the difficulties in the Department I was also trying at the same time to keep my eye on when I would be required here. I understand that the previous Debate finished rather earlier than was expected, and I came as quickly as I could.
I do not object to my hon. and gallant Friend raising this issue, although I am sure that neither he nor I want the Debate to turn into a general charge against industry as a whole. I certainly did not, when I made the statement. I would like to say that I made the statement, with very great deliberation, at a time when, if I may use a simile, there was an earth tremor going on in the industrial world, throughout this country and other countries, by which the war effort was likely to be seriously endangered. I proceeded to go through many of the inquiries held at the Ministry of Labour and to analyse what I regarded as the contributory causes of many of these disputes. If I proceeded to give names in the case of one class—there were


about four classes mentioned in my statement—I should have to be willing to give names in every class. I mentioned Trotskyites, Communists and a number of others in this connection. I do ask the House to try to read the Debate in the atmosphere in which I made the statement. I think the proof of the pudding is in the eating. The statement I made that day in connection with this very difficult industrial trouble had a very salutary effect, as I think employers and trade unions in general will agree, and there died away what looked like a very difficult situation.
Of course it may be said that I am an old poacher turned a game-keeper. I suppose I have had a much wider, longer and more intimate experience of these problems than my hon. and gallant Friend and it probably leads me to judge motives in a different way. I am not going to put anybody in a white sheet in relation to strikes, which are brought about by very many causes, and I tried to convey that in my speech. I said that some of them were provoked by the employers. I did not for one moment say that all employers were provoking strikes. The great federated employers of this country have been, like the trade unions, a tremendous asset in carrying on peacefully the industries of this country during the war. But there are instances on both sides. There is nothing in any Order for which I have been responsible or which the Government have authorised me to issue, that gives me any power to prosecute for provocation. On the other hand, it would be unfair for me to come to this House and, after the inquiries I have held over a tremendous field in this war, to ignore that, in certain cases, a limited number of cases, I have been perfectly satisfied that provocation has produced the dispute.
Therefore, I utter this warning. I do not think there is anything wrong and I have had no complaint from any great federation of employers that they have misunderstood what I have said. My relationship with them has not changed in any way. They quite appreciate—those who know me—exactly what I meant and what I intended to convey. I go further and say that there has been a tendency in the last six or seven weeks towards a greater desire to under-

stand, where previously I had been experiencing some difficulty. It is equally true that the warning I uttered against political interference with trade unions has resulted in its dying down since that Debate. I make no point about it, but we are prepared, if there should be a recrudescence, to take the necessary steps to prevent it arising again. What I was aiming at in this very serious statement was to impress upon the House and the country the desirability of utilising the opportunities these discussions allow, for the careful consideration of the matter, and not to approach them with any ulterior motive on either side. Directly you get, on the part of a management, in a very limited sphere, any feeling of "Now is the chance, with this discontent, to achieve some objective other than the settlement of the strike or of the grievance," you immediately import into the situation an atmosphere in which settlement is impossible. On the other hand, if a legitimate grievance arises, the intervention of any political party with an ulterior motive, also makes settlement impossible. I tried to the best of my ability in that difficult man-power discussion, when the question of unofficial strikes had been raised—not by me but by hon. Members and I do not think incidentally it had very much to do with the Debate—to indicate in my reply, the difficulties.
Now I am asked to mention names. I tell the hon. and gallant Member that sometimes one does not get the real facts of a dispute for months afterwards. One does not get to the bottom of the matter till after the men have returned to work. You must have inquiries. Matters are gone into, and very often you can see that there are basic causes and that the actual merits of the dispute were not the real factors in the matter at all. There have been such cases over the past three and a half years, since I have been a Minister, which, looking back over them and reading them up, made it important for me to utter that warning and statement on that day. I should be cowardly if I stood at this Box and gave the names of people. My hon. and gallant Friend says it would be a castigation, but that I did not do it outside, so that the man concerned could defend himself in the courts. I am in this difficulty that, if I mentioned names—

Sir A. Southby: Will the right hon. Gentleman allow me to explain? He was not present to hear what I said and it may be that something written down by a colleague does not give him the right idea of what I did say. I did not say that at all. I said that there was a responsibility on all of us, and particularly on Ministers, because we were privileged to make statements in this House on which we could not be challenged outside and that our statements should be properly substantiated in this House.

Mr. Bevin: One hon. Member said that nothing would have such a derogatory effect as the statement of a person's name in this House. I agree, but I think it would be grossly unfair—I agree here with my hon. and. gallant Friend the Member for Epsom—to make statements about individuals in this House, unless I was prepared to make them outside.

Sir A. Southby: I really must not be misrepresented like that. We all have the right to make statements in this House, if we believe it to be in the public interest to do so, and we cannot be forced to repeat such statements outside. I am not suggesting fiat the right hon. Gentleman should be forced to make outside the House statements which he has made in the House. That would be, contrary to Parliamentary practice. I suggested that, when he makes such a statement he should justify it in this House.

Mr. Bevin: I am justifying the statement, without particularising individuals. If I proceeded to substantiate my case by naming individuals, I should be in honour bound to do that outside, to give them the opportunity to defend themselves. That may not be Parliamentary practice, but it is equity. If I mention a person in this House and then protect myself with Parliamentary privilege, that is a cowardly thing to do. I base my statements on the general deduction I have made from a number of inquiries, without castigating anybody. I make no general charge either against the coalowners, the engineers or anybody else in the whole

country. I said "Some." Nor did I refer to employers as a whole. Indeed, I am grateful to them. No Minister in my position could have carried on his very difficult task unless I had had what I call the policing of the orders for which I have been responsible by the trade unions and the employers' organisations of this country.
In fact if I pass out of this office with the same record in regard to industrial disputes in the war effort that I have maintained up to now I shall be a very proud and happy man. It is no easy job. I did not, I assure the hon. and gallant Member for Epsom, make this statement lightheartedly. As Minister of Labour I knew that during that fortnight I was absolutely living on an industrial volcano. There were many forces working in all directions; they were boiling up as it were. There were many motives at work. In a very short reply at the end of a long Debate, perhaps too concisely, I summarised them in three or four headings to try to indicate the kind of thing which was producing difficulties and had wide repercussions, not only on the works immediately concerned but on the whole difficult industrial problem. I am satisfied that the course I took that day had the effect of helping the executives on both sides to co-operate with me in a way which got over the most dangerous point we hays come to in the four years of the war. It was centred around one or two well-known disputes then in being. As it was, it helped to tide us over and get us on to a line which I believe will enable us to deal with what to me was the most vexed problem of all, the tiredness associated with the war effort, giving provocation having such an easy field, such fruitful ground to grow upon. I believe that as a result of that Debate, the drastic statement I made will help us to a clearer understanding and to avoid some of the difficulties and get through this terrible fifth year of the war.

Question, "That this House do now adjourn," put, and agreed to.